Can the Time Capsule back up multiple drives (internal and external) at the same time? I have a 500 GB internal HDD on my MacBook Pro and a second 500 GB external USB drive as well.

Is it possible to tell Time Machine to back both the internal and external drives up to one Time Capsule?
Yes - when you set the Time Machine to back up to the Time Capsule - you will include the internal drive by default.  I would let a couple of backups complete, and then go to the settings for time machine under options and make sure the external drive is not excluded. Kick off a a backup with the external drive connected to make sure it works.

If the drive isn't connected when a back up event arrives, the internal will get backed up - but the software will remember and resume backing up the external any time it is connected and a back up happens. You don't need to always have the external drive connected for this to work, you just lose some chances to back it up when it's not connected.