External Hard Drive for Macbook Air

I'm new to Mac and just recently purchased a Macbook Air. I'm using my new laptop as a desktop also. I'm ready to buy an external hard drive to back it up on a regular basis. I need some advice on how to proceed. I went to my local electronic superstore and they proceeded to completely confuse me.

1) The "Time Capsule" seems very cool, but also very expensive. Is it worth the extra money vs. other non-Apple external hard drives?

2) If I get a non-Apple external hard drive, does it need to be configured Mac specific?

3) Is a wireless external hard drive that much faster than one that is connected via USB? If so, what kind of difference are we talking?

4) Will a non-Apple external hard drive work well with the time machine function on my Macbook Air?

Feel free to add any additional feedback.

Thanks!

1) You probably do not want the TC unless you're planning to upgrade your router also. The 2TB TC price is on the high side, but not too bad if you want a router backup combo. Part of that price is for convenience - and my TC has been working flawlessly for over 3 years now. When you can get a 3TB USB external drive under $150 all day long, the 3TB TC is outrageously overpriced imho.

2-4) Just about any external drive will work just fine.

The main ones that will not work are an extremely few that have hardware based encryption on them and/or require software designed exclusively for Windows. These are not the primary drives you're going to find sitting in any store.

Yes, the drive needs to be formatted as HFS to back up your Mac.

Very helpful.

Thanks!

I don't think you need TC.
When I put an SSD in my MBP I had an HDD just sitting around. And was poor from funding the SSD : )
I bought one of those plastic enclosures for 8 euros and it came with the
little USB cable. I use Time Machine and it works great. The guy at the store reformatted it for free.