Buffalo has been aware of this problem since at least March (when this thread was opened) and they have done nothing about it. The problem is that Apple disabled support for DHCAST 128 in OSX Lion and all Buffalo NAS drives need Netatalk 2.2 installed and updated to work with Time Machine. (Or Netatalk 2.1.5 source can be compiled with uams_dhx2 support.)?
They have acknowledged the problem on their Asian support forums:
http://www.buffalo-asia.com/support/macosxlion/index.html#networkhdd?
But I was told by a Buffalo tech that the Asian support forums do not apply to products in the United States.
If you are a dissatisfied customer, I suggest that you contact the Better Business Bureau and notify them of false advertisement, as Buffalo clearly does not support OSX 10.3.9 and later as it claims to in its advertising. Additionally, you can rate Buffalo NAS drives as 1 star on Amazon, Newegg and Tiger Direct--citing lack of support as your reason.
If Buffalo does not want to support its customers, then we should not support them as a company.