I found this guide and I am doing it right now to move my Time Machine backup to Wireless again.
It is actually very straight forward and doesn’t need any third party software. I will report if I have success. This guide is only for Mac OS X 10.6 Snow Leopard though, since it is actually using Finder to copy all the Time Machine backup files, I guess it requires the Cocoa Finder in 10.6, and the 10.5 Carbon Finder just can’t do it.
I am doing this because my USB drive is very noisy. And with the latest Airport Extreme firmware update, it seems now it can do over 5MB/s copying, compared to 3-4MB/s before. I think it is worth a try. But a 500GB USB external hard drive probably is still too small for me. I am thinking of adding incremental back up also for important folders without Time Machine onto the 2TB hard drive I recently got. Macally Firewire 800 External Harddrive enclosure seems pretty solid, except that it has only one Firewire 800 port. Luckily my OWC one has two and they can be connected. The Seagate 2TB drive is a bit noisy when it started spinning, scary.