Among a slew of other changes and upgrades in OS X Lion, it has been confirmed that the new version of Time Machine in Lion temporarily kills the option to backup to a third party NAS server.
Apple stresses the importance of the Time Machine mentality in Lion, with the Versions feature working in the same way to keep backups of your documents and other files. Killing the ability to backup to a third party NAS (Network Attached Storage) drive reflects Apple’s desire to, well, have you buy more Apple hardware.