The price of HDD declined significantly last years. Today, you can afford a 2TB one for less than $100. Why not take this opportunity to increase the capacity of your Time Capsule?
For that matter, prefer a silent and energy efficient HDD (e.g. “green” products from Seagate, Samsung or Western Digital). These HDD rotate more often at 5400 rpm. That’s enough to do daily backups (not so IO intensive).
Here is a step by step procedure to change your Time Capsule disk in no more than 15 minutes!