Hi,
I have the same setup as you do. A DNS323 with mac osx 10.6.
First of all, i actually works quite well. I only use it trough wifi anf i have about 3 to 4 MB/s. With firmware 1.08/1.09, you have by default bonjour. But it doesnt work quite well. There used to be an add on package for the DNS that has been removed from the dlink site but i think i still have it on the dns. So by just installing it trough the webgui, you have a much better bonjour support
Secondly, out of the box, the dns is not timemachine aware and unsupported. But again there is a solution for it. I use the dns as a timemachine target for about 3 years now.
I have written this in a step by step doc on how to enable this. Basically you need to make a local sparsebundle of the capacity you would like to have that timemachine can use. Copy that over to the dns, make a special user with acces and , done :-)
Again, it's a nice product for osx , shares trough smb, afp, timemachine etc with very little intervention for enabling all of this.
Give me a day and i will send you the bonjour package and the step by step guide for timemachine