Make sure you are running Mac OS X 10.5.2 and have all the latest updates installed.

1) Open “Terminal” and enter the following command (one line):

defaults write com.apple.systempreferences TMShowUnsupportedNetworkVolumes 1

2) Mount the network volume using Bonjour or any other method.

3) Open up “Sharing” from System Preferences and take note of the computer name exactly. Open “Terminal” and type “ifconfig en0 | grep ether“. Take note of the MAC address.

4) Open “Disk Utility” and click “New Image” to create an image with the following settings:

* in the Save As and Volume Name below replace “ComputerName” with noted computer name exactly and replace “MACAddress” with noted MAC address WITHOUT colons (e.g. 0012ab3c4def)

Save As: ComputerName_MACAddress.sparsebundle
Location: Your mounted network volume Your desktop (see Note 1)
Volume Name: Backup of ComputerName
Image Format: sparse bundle disk image (this setting is the last one but choose this FIRST or else you may get an error if you specify a volume size larger than the free space on your computer)
Volume Size: Choose any appropriate size for Time Machine (this cannot be changed later I don’t think; also choose a size smaller or equal to the size of your network volume!)
Volume Format: Mac OS Extended (Case-sensitive, Journaled)
Encryption: none
Partitions: No partition map

Click “Create”. A new sparse bundle image should be created in a few moments. Quit Disk Utility after it is done and eject the new volume. Move this new image from your desktop to your mounted network volume.

5) Open up Time Machine preferences and click “Choose Backup Disk…”. Choose the network volume with the sparse bundle image inside and click “Use for Backup”. Close the preferences and Time Machine should start backing up to your network volume.

Note 1: one thing I notice is that sparse bundle images cannot be created on the network volume directly (you will get an error message); this is likely the reason why I and many other people are having problems doing a brand new Time Machine backup to a NAS (Time Machine tries to create a sparse bundle image to the network volume directly and fails)

Note 2: the network volume does NOT need to be formatted HFS+; I have tried to backup to a NTFS shared volume and that works too!