Then @dancres pointed me at these awesome instructions on how to do it. The only trick is the sparse band size needs to be changed on Snow Leopard as mentioned here.
So the only change from the above instructions is the big meaty command I used to create the sparse bundle was this (my changes in bold)...
HN=`hostname | cut -f1 -d.`;MA=`ifconfig en0 | grep ether | sed "s|:||g" | cut -f2 -d' '`;hdiutil create -size 350g -tgtimagekey sparse-band-size=262144 -fs HFS+J -volname "TM_$HN" $HN\_$MA.sparsebundle
Then rsync it to your network drive as per the instructions above and it just works - yay!
rsync -avE mymachinename_12345.sparsebundle /Volumes/Whatever
(in the above you use the real generated sparse bundle name, and the real name of your network drive volume :)