I run the Mac side wirelessly into a 500GB Time Capsule. The XP side I back up into a FireWire 500GB External. The Mac side is set and forget. My Time Machine only backs up the OSX side automatically. When you are in XP mode, the Time Machine is not running.
I ran the Ethernet into the Time Capsule as well and connected to the Internet through the AirPort.
I stopped that because I am on a slow Internet connection and the back up process takes place every hour, and slowed down the Internet. So I changed the Ethernet back in to the iMac and use the wireless or FireWire to back up. That now runs very smoothly and the net is as fast as I can get it.
:-D It would probably be faster and cheaper to use a single FireWire external for both XP and OSX, but I think the wireless is too cool. I use it as a base station and connect other Macs into it. They can all share files. I don't have a wireless printer, but the Macs could share that as well if I had one.