How to setup Time Capsule as wireless router cascaded under another router

I'm lodged on the second floor of a house where I get one ethernet cable coming out of an old 4-port NETGEAR router (connected to an ADSL modem that) on the first floor. The router gets an IP from the ADSL 87.xx.xx.xx and re-leases on the LAN 192.168.0.2 thorugh 99.
Up here I would like to set up my Time Capsule to create a wireless network. I need to use the connection coming out of the downstairs router.
All configurational combinations of these two routers that I've tried (plenty) are giving me horrible network conflicts between the Time Capsule and the down-stairs router. Even if I use static IP (192.168.1.100) and enable bridge mode on my Time Capsule, I get slow pings and 30% package loss pinging 192.168.1.1 (the router downstairs).
ADSL straight to the Time Capsule and assisted setup works fine so cables and my other hardware seem ok.
I've got access to configure all devices as I wish.
Thankful for help.

NO. Things are not ok!
Just as I accepted the package-losses and lowered experienced surfing-speed I realized that I couldn't send mails or upload files to my ftp.
Now I get systematic. I test both my wired and wireless connections with ping and through www.speedtest.net.
Test
Ethernet to my iMac:
Ethernet to bridged TC and wireless to my iMac
Speedtest.net (down)
1.98 mbps
1.90 mbps
Speedtest.net (up)
1.74 mbps
0.02 mbps
Ping* to router
0.8ms (0% package loss)
2.5ms (5% package loss)
Ping* to apple.com
178ms (6% package loss)
190ms (5% package loss)
* Ping averages calculated on 100 pings
What can one conclude / suspect from these numbers? Why does my upspeed drop? I also feel that it's slower to surf wirelessly. I don't feel that the 1.98 to 1.74 mbps drop accounts for that though. I know that conversion to wireless should make for a speed-loss. (I read 10% which seems to be what I measured here).

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    See Here  >  Using Time Machine with a Time Capsule
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    leejpepper wrote:
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