[Jaygray]

I believe you could partition the drive and then use a portion for TM.

Also, you can allow TM to use the entire drive and still use it as a regular external drive. As long as the drive doesn't fill up completely (which could be a problem with a 160gb drive) it will work perfectly. It would just depend on how much you are planning on backing up with TM. 160gb isn't as big as it used to be.

I've been backing my 160gb MB up on my 500gb Time Capsule using TM and also using it as an external drive for a year now. It works perfectly.