Ever since I decided to start using Time Machine it has been bugging me that I could not figure out how to back up my my iMac to an attached FireWire HDD and my PowerBook to the the same HDD over the Network. Of course I could buy TimeCapsule, but I wanted to make it work with what I had. You can find tips to active an attached HDD on an Airport Extreme or other network location (e.g., here, or here), but I was not interested in that. Also, there are some solutions out there for using Leopard Server (e.g., here, )
The solution presented below requires just one one desktop Mac with an external HDD (I use firewire, but I would expect USB to work as well), one Mac laptop, and any local wireless network (I use my ATT U-verse modem/router). I learnt that I wanted to do is possible from this Macworld article, alas, it does not give detailed instructions. read on to find out how it works.