Better late than never, D-Link released a beta firmware to address the incompatibility issue with OS X Lion. The beta firmware 2.02 B01 can be found on D-Link Forums. Both Apple Filing Protocol (AFP) and Time Machine (TM) are working as it should on the DNS-320 with Lion.
A little history about the AFP and TM issue can be found here. Basically, Lion’s AFP is using a different security mechanism, hence breaking AFP support for quite a fair bit of NAS. I put up a workaround sometime back before D-Link came up with theirs.
Give the beta firmware a shot and continue with your Time Machine backup!