How can I get my time capsule and airport express (as a network extension) working properly together?

Hi,
I bought a time capsule a while back and connected it to my modem, and it seems to be backing up my hard drives but I can't tell if I'm getting my wireless signal from my time capsule or from the modem itself, which used to before I bought the time capsule.
It's bugging me because I'm trying to get my airport express to work as an extension to my network, and airport utility half the time can't pick up the express. I heard that it will only work of the time capsule is working as the base station,and I'm not 100% sure this is the case.
Also, how far can the airport express be from my time capsule for it to be picked up? I tried resetting it which helped to start with, but when I was setting it up to extend my network it just told me that there was an error and to try again, which I did with the same result.
Any advice would be much appreciated!
Cheers

Always do setups with ethernet.. setting up wireless via wireless is like cutting off the branch you are sitting on.
You do not need the TC in the network to do the setup.
Plug it by itself into the computer. Same with AE. But do each separately.
Give the TC a different wireless name.. like TC.. then you will know the TC wireless is separate and different to the main modem router. Simply allow it to be extended.
Plug it back into the main modem.
Now do the AE.. set it to extend the wireless of the TC.
When you do this check the signal level. The airport utility v5 has a full diagnostic of wireless client levels.. do not use v6 utility.. it is useless. The AE is placed somewhere in between the TC and the clients you want to connect.. it has to get decent signal itself to extend wireless. And there is no way we can tell you how far apart.. pick the half way point.. around about and suck and see. If it doesn't work move closer to the TC.
Count the walls the signal is going through.. about 15% signal loss for each one.. if angle is acute 20%.. floors are worse.. they might be 20-25%..

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