With today’s Time Machine and AirPort Updates v1.0, Apple Mac OS X 10.5 Leopard’s Time Machine now supports USB hard drives attached to Apple Airport Extreme Base Stations, MacDailyNews can confirm.
In other words, an Airport Extreme Base Station (AEBS) with an attached USB hard drive can now function with Time Machine and perform wireless backups just like Apple’s Time Capsule.
After applying the Time Machine and AirPort Updates v1.0 and restarting, users should launch Airport Utility (Applications>Utilities>Airport Utility). This will prompt the user to apply the 7.3.1 Firmware Update for their Airport Extreme Base Station.
After doing so, users with Airport Extreme Base Stations with attached USB hard drives will have Time Machine functionality (use System Preferences>Time Machine to set up your desired drive; you may have to Connect to the drive via the Finder in order to see it in TIme Machine Preferences).
At this time, it is unclear if Apple officially supports using a hard drive connected to the AEBS USB port for Time Machine (but their latest software sure seems to).
MacDailyNews Note: MacFixIt confirms here.