How to setup ADSL moden router and Airport Express 802.11n (1st Generation) to provide internet and airplay connections to multiple devices?

I have a Netgear wireless ADSL modem router (wireless + four ethernet out ports)  that i'd like to connect to a 1st gen Airport Express to create a small home network to provide internet access for a MacBook, iPhone and Apple TV, and to provide Airplay connection to the Apple TV and Airport Express audio output jack.
I'd like to turn off the wireless function of the ADSL modem router, and to have from one of its ethernet out ports an ethernet cable providing internet directly connected to my MacBooks ethernet port.
Then from one of the other ethernet outs on the ADSL modem router an ethernet cable connected to the Airport Express's ethernet port. This would be to provide wireless internet connection for the Apple TV and iPhone via WiFi from the AE.
At the same time as the MacBook is receviing internet soley via the ethernet in port, i'd like it to have WiFi connection to the AE to provide Airplay connection to the Apple TV and the AE's audio out jack.
Is this all possible? How should I go about to configure this? How should the AE's ethernet port be configured?
Any special modes the ADSL modem router or Airport Express should be in? ie bridge or client?
Thanks

On the ADSL modem router web-based interface, should I set any security setting? I think not as there'll be no wireless signal coming from it, only wired ethernet connections to both MacBook and AE. Security should only be set on the AE to prevent someone from accessing its WiFi signal. Is this assumption correct?
These are all correct!
How should I go about setting up security for this network?
First I would recommend that you configure the AirPort Express for WPA2 Personal. This will provide you with the greastest level of security while still providing excellent bandwidth performance.
You would configure wireless security for the Express by using the AirPort Utility on a Mac, PC, or iOS device. Using your MacBook Pro as an example, you would do so as follows:
Run the AirPort Utility.
Select the Express, and then, click on Edit.
Select the Wireless tab to enable it.
Set the Wireless Security option to: WPA2 Personal
Enter the desired password in both the Wireless Password & Verify Password fields. Note: Use of a "strong" password is encourage here. By strong, I mean use a mix of upper/lowercase letters, numbers, & punctuation marks. Try not to use common dictionary words. If you operate your wireless in an area where security is of an utmost concern, I would further suggest that you change the wireless security password every 60-90 days. Also don't forget to change the default AirPort Base Station Administrator password as well.
Click on Update and allow the Express to restart.

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