We have had Time Capsule for a few years. We have several computers in the house and it backs them all up wirelessly every 30 minutes or so. When we go out or on holidays, we just take it with us in a bag and everything is safely with us.
Do you want a storage device or a backup device?
There are a few options:
i) Time Capsule
The Time Capsule is a backup device that wirelessly backs up your machine. It can be very tricky to set up and it is advisable to initially connect it with Firewire/USB when setting up initially but once set up it will do a wireless backup of your machine on a regular basis.
The Time Capsule has the advantage of being able to be located in another area of the house therefore if there is a flood or localised fire where your computer is and the Time Capsule is in another room your data is safe. However please be advised many properties in Dubai (in particular Arabian Ranches) have very thick walls and the range will not be far on a wireless device.
Apparently you can use it for file storage as well.
I would recommend the Time Capsule if you are using a laptop and want a backup device set up wirelessly, and if you are concerned regarding physical data damage.
ii) External HDD
Alternatively you can just buy an external HDD, plug it into the Mac and set it up using Time Machine. It will cost less than the Time Capsule but will not work wirelessly. It will probably be easier to set up (in my experience) and backups will be smoother as it will back up using a cable.
I would recommend an external HDD if you are using a desktop machine, you want faster simpler backups, you want to save money and you are not fussed about the backup being in another room.
iii) Partitioned External HDD
I have not tried this but logically you should be able to partition an external HDD and use part of it for additional storage and part of it as a Time Machine backup. Be aware however that unless you have an additional backup any data you store on the partition will not be backed up.
I would recommend this if you have some data you want a backup of and you need a little additional storage space for other data that is not important and does not need backing up.
iv) Airport Extreme Base Station plus External HDD
This is (apparently) not supported by Apple however is feasible.
I would recommend this if you are concerned regarding the quality of the HDD on the Time Capsule and would prefer separate components and you already have an Airport Extreme Base Station
v) Time Capsule plus External HDD
Again I have not tried this but apparently you can connect an External HDD to the Time Capsule and use the External HDD as additional storage/file server.
I would recommend this if you like the idea of the Time Capsule and want some additional space for storage as a wireless file server, especially if you have a Mobile Me account and would like to access files remotely.
vi) Mobile Me or other Remote Storage
Web backup space. You can back up your documents to an online service. This would be costly and impractical for large files (such as video files) but ideal for documents and limited photo storage.
Recommended if you are concerned regarding physical damage to your machine and would like the backup to be located elsewhere in the world and if you would like remote access to your files.
vii) Several External HDDs
This is what I currently use. I have a number of external HDDs and I simply copy backups from disc to disc. You could also set up one as a Time Machine and one as additional storage.
Lastly a combination
I intend in the future to set up two external mirror RAID drives for all my music and videos (not important as I have originals on disc) and purchase a Time Capsule which I intend on linking to my Airport Extreme Base Station to hopefully create a stronger network. I will set up Time Machine with the Time Capsule to back up only photos and general documents. I also purchased additional Mobile Me space and backup important documents and photos to there.
I use my main computer as a remote access file server but may purchase a Mac Mini in the future if I am concerned about security.
In summary, the Time Capsule is a great idea, as with any devices with a HDD it has had some HDD failure but this is luck of the draw. However it can be an absolute nightmare to set-up, or it can set-up smooth as anything. But if you have a desktop and simply want a Time Machine backup I strongly recommend saving your pennies and getting an external HDD instead.
Hope this helps.