Thanks gellar. As to why, it's because I don't want my iTunes library to take up space on my laptop. My current (OLLLLLD) MacBook is a 2007 white with an 80GB HD. If I get an air (with say, 128 GB storage), I'd rather not clutter it up with music instead of Photos. I figure if I can stream my music from the TC, then I can put some of that 2 TB of space to good use and save the same on my laptop.
I do use the home sharing and really like it, but I don't leave one computer on at all times to be able to stream from (which I guess is always a possibility).
Yeah my worry would be that if you wanted to use the disk as remote storage AND still want to use home sharing, that experience may not be ideal. Again, never tried it though.
Theoretically to set it up, you'd just go into iTunes preferences and point your library over to the new location.