More Than One Computer Trying to Access Web = Very Slow Download Speeds?

We have Verizon DSL with a basic Westell modem, which supposedly is only a modem with no router capabilities. We have an Airport Extreme Snow Base Station that acts as a WDS Main, with one other AEB Snow as a WDS Remote. All computers have unique ip addresses in the 10.0.1.X range as provided by the WDS Main's DHCP.
When only one computer connects to the internet to download web pages, software updates, etc., there seems to be no problem at all. When I do a speed check I get results that seem to be in the correct range, and it doesn't matter which computer I use for the test.
However, if we try to access the internet with more than one computer at the same time, everything slows to a crawl. Such as, if one computer is downloading software updates, the other CPUs have super slow web page downloads, slow to the point of connection time-outs at times. Or if two of the computers are simply trying to download web pages at the same time, one or the other has super slow downloads.
I feel like there is some kind of routing problem with the Base Station but for the life of me I cannot figure it out.
What could the problem be? Where could it originate, and what, if any, advice could someone give me to help trace the problem?
Thanks in advance.

... the one computer I am looking at right now shows DNS servers as 10.0.1.1, which is the internal ip address of the AEB. Could this be part of the problem?
That is normal and shouldn't cause a problem. Essentially it tells the computer to ask the snow AirPort base station (ABS) for DNS information. The ABS will then provide the DNS information which it currently received from the ISP.
Would it help if I manually entered the DNS numbers that appear on the AEB on each machine's Network Preferences?
Probably not. A busy DNS server or faulty DNS info won't affect download speeds. That only affects browsing since that requires the computer to convert human readable addresses to numbers that the computer can use.
Remember that the snow ABS only operates at 802.11b (11 Mbps) speeds. Then when you use WDS it cuts your available wireless bandwidth in half.

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