We have the 1TB Time Capsule from Apple. More expensive but I don't have to harp on my wife to plug in an external. It works as both the router and has a hard drive built in that Time Machine can just do its thing to multiple times a day and everything is good. A fire on the other hand would still cause some problems...
If you current router has a USB port I think you would be able to plug an external in and still be able to back up wireless as well.
I have been meaning to talk with our IT guy at the office to see if I could set up a server there and remotely back up my home computers. Not knowledgeable enough to do it myself, but if it could be done, then I'd have offsite backup and own it myself
I have a 1 TB worldbook from Western Digital. It plugs into the router with ethernet cable and can be mapped to any PC on your wireless network. It is sort of like having your own server. It comes with nice back-up software. AND...has a internet remote access site that works pretty slick in a pinch if you need to get files or send files. You can even make areas that others can access remotely.
The only issue is, while it is a gigabit speed device, the speed is limited by your routers wireless speed unless you plug directly into the hub.