Time Capsule - 3TB

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I am concerned about the TC reliability. If I use a generic hard drive will Time Machine continuously update and work normally?

Will Time Machine work as well with a generic hard drive?

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    Time machine works with external hard drives. Time machine has been reliable for me to go back to several versions of a document when I needed to compare different versions of an idea my team was working on. Each version was there by date... It won't store all of the changes to the documents; however, but it stores copies every hour or so.
    I've been using a 500GB drive mounted via USB. I travel a lot for work and periodically back everything up that way. Works great. Buy lots of drive if you change lots of files though--it needs more space than your computer to work effectively and the further back in time you would like to be backed up the more drive you need to get.

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