Airport Express in Bridge Mode.. No AirTunes, limited functionality

I can only get my internet connection working through my Airport Express (AE) in bridge mode (i.e. the AE connects using 'Ethernet' as opposed to PPoE or WDV).
My computer is then able to connect to the internet using PPPoE.
Interestingly, the amber light is flashing although the internet connection is working fine.
Also, I cannot use AirTunes, and Airport Admin Utility cannot see the Airport Express.
Now, if I go into System Preferences>Network and disable PPPoE and check DHCP instead, I can see the Airport Express in Airport Admin Utility, the light becomes solid green and AirTunes starts working... BUT... my internet connection stops working!
Alternatively, I can now go into Airport Admin Utility and configure the AE to connect using PPPoE. However, no matter what settings I input in System Preferences>Network, the internet connection does not work. However AirTunes does work, the light is green and I can find the Airport in Airport Admin Utility.
It wasn't always like this. Sometime in late November / early December my Airport Express suddenly stopped connecting to the internet. Since then I've been trying very hard to get it working again, with numerous resets etc but its just not happening!
Can anyone tell me what I'm doing wrong or what I should do?
Thanks in advance (from a recent Apple convert)

Thanks for the very quick and helpful reply.
However I've tried on numerous occasions to configure the AX to connect to my ISP using PPPoE but it's always "looking for a PPPoE host". In addition, my ISP tells me that when I try and connect through the AX they dont see any requests coming in.
Was there a firmware or similar upgrade sometime in late November or early December of this year? I'm asking because all was fine prior to this period, after which internet through the AX only works in bridge mode, with the amber light flashing and no AirTunes functionality. Perhaps if i roll back the driver/firmware then it will start working again?
Also, is it a limitation of the AX that you cannot use AirTunes or even Airport Admin Utility to configure the AX when the AX is in bridge mode and the computer is not using DHCP to communicate with the AX? That doesnt seem to make much sense to me.

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