Originally Posted by pacificjourney1
OK, So it just uses the wireless connection but not internet data correct? I don't think it matters but Just in case my external HD is plugged into the airport via USB port.
It's all internal, the connection that comes into the airport gives you a single externally routable IP address. The Airport has its own network with multiple addresses so that devices can talk to each other locally (LAN - local area network). Transfers between devices don't go out to the internet at all.
The only things you need to worry about are things that use your external IP. If you used Back to my Mac for example, that would use your service provider to link up to another device as it uses iCloud.