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Fortunately, they released the documentation on the afp extensions that time machine uses. This means that there are third party solutions which behave like a real time capsule.
FreeNAS is highly recommended, it supports time machine but can behave as normal NAS, supports raid and a whole load of other stuff.
We do incremental backups of our time machine backups at work to external drives, they're spare bundles so incremental changes aren't that bad. Also means that when time machine spews, we can "binary chop" to the last working time machine image.
I was going to buy new 2TB with my iMac. Posted in here and got pointed to Samsung S2 1TB drive. Got it today for 58 quid from Amazon, plugged it in and it was recognised, time machine saw it and did whatever it does and now iMac is backed up. Cheaper option for me and does what I wanted it to.