Chris,
In case you're still looking for a solution, here's what I did to backup our Terastation 1.0 Pro:
The TeraStation has a static IP address. I created a user defined selection using the \\ip_address\folder_name instead of using the machine name.
I do have security enabled on the TeraStation shared folders, so I created an account on the TeraStation with read/write permissions on my target folders. On the Backup Exec server, I created a local account identical to that on the Terastation and made it a member of the local admins group on the server. When installing Backup Exec, I used this account, so all services and logons used by Backup Exec match the account on the TeraStation.
When running the backup job, it completes with exceptions. The exception is that no remote agent was found on the target TeraStation, however the data was successfully backed up and I also did a successfull test restore.
FYI - the computers involved here are in a workgroup, not a domain. Like the rest in this thread, I wish I had researched this more thoroughly before purchasing the TeraStation. It has a lot of capacity for the price, but it also has some severe limitations.
Hope this helps!
John