Airport Extreme best practice configuration for Sleep Proxy, DHCP/NAT and PPPOE

Hi
I have recently bought a Airport Extreme and it is working well.  One of the reasons I bought is to take advantage of the Bonjour Sleep Proxy on it so I can wake my MAC up remotely from my iPad using the REMOTE app to stream things like iTunes etc...  I followed the set up instructions and basically let it configure itself.  I have an ISP router / modem which currently is providing DHCP services, NAT and PPPOE.
The Airport detected all of this and set itself up as bridge only.  The speed of the network outo to the internet is fine (more or less what it was before).  However, in doing a bit of research, I have found out that if I want the Airport to act as a sleep proxy, I need it to "host" the network.  I am not an expert in networking but from what I understand I need the Airport to be moved from "Bridge Only" to at least be providing DHCP to my internal network clients.
This has prompted me to ask what is "Best practice" when it comes to configuring the Airport given I want to have Sleep Proxy enabled.  I think the two options I have are as follows but would really welcome feedback on which is the best option to go for or if there are other options I should be thinking of
(1)  Have the Airport perform DHCP for my internal clients and leave the ISP router/modem doing NAT
(2)  Have the Airport perform DHCP and NAT.  I think to do this I need to turn the ISP router / modem into Bridge mode only.  (I've looked and I seem to have this option on the device.  It's an Irish ISP branded device but I think it is a Zyxel)
I have no reason to believe the ISP router / model is doing a bad job but given I understand the Airport Extreme is a reasonably high-end device (I think?) I am wondering if option 2 is the way to go.
In addition, during my research, I have also discovered that many people seem to have their Airport Extreme also handle PPPOE.  This is currently being done by my ISP router/modem.  I am  inclined to leave it this way (following the mantra if it isn't broken, don't fix it) but if there was a good reason to have the Aiport do this, perhaps I should make the switch?  Having said this, I have seen on this forum and others, some posts about problems with Internet connection drops when the Airport is handling PPPOE.
So, a bit of a long post, but if anyone has any information or perspective on this, I'd very much appreciate it. 
Thanks
Dave

I forgot to thank you, John Galt. Yap, it solve my problem by restoring back the original firmware to 7.6.1. My unit is Airport Extreme 2012. I am still using double NAT because I cannot figure it out on how to set DHCP only in the Network tab.
My goal it to use the airport extreme to the internet and to share the internet to all my devices in the house. Just like my previous Accesspoints. Before I use AP+router Linksy$ WRT54G and D-l!nk DIR-655 without activating the NAT to share my internet connection and they work.
My problem is that when I set it to DHCP in the internet tab and DHCP in the Network tab in Airport Utility inorder to solve the double NAT situation, only one of all my devices (wired or wireless) can connect to the internet. Each time I connect the other device(s) to the internet my subscriber will verify my subscription (web browser based verification) in which I have to manually enter my account number, etc to validate my subscription.
So I stick to double NAT so that I can share the internet
Our broadband provider uses DHCP to link us to the internet. If I change the settings to Static in the Internet Tab, my broadband provider will not let me connect to the internet. In the Airport Utility if I set to static in the Internet Tab inorder to set it to solve the double NAT, a message box appear informing me that I have invalid beginning IP address in the DCHP range in the Network Tab when it appears that only the last 3 digits of the DHCP range is editable.
Is there any way of configuring the Airport Utility's Internet TAB to DHCP and Network TAB to DHCP to connect to the internet with all my devices without the double NAT and without the aid of another device such as AP or router or switch connected to the Airport or vice versa?

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