Need advice about best way to update current AEBS network ...

Here's my current set up -- AT&T DSL service via a DSL modem (DSL modem is original to our DSL service, which means its 7 years old. I'd like to replace, but not from AT&T as they want to charge me $75 to buy a new one from them which seems crazy). Modem is connected via ethernet to an AEBS. iMac G5 running snow leopard is connected via ethernet to AEBS. The AEBS creates a wireless network, which is extended by one Airport Express, which is also connected to our home stereo, and used to stream music wirelessly. Have a PS3 that is connected via ethernet to the Airport Express, and have had some success streaming video from iMac to PS3 via MediaLink but network often bogs down. We also have an Intel MacBook running Snow Leopard.
Here's my question -- the fastest DSL service we can get from AT&T is their basic (1.5 mbps down/384 kbps up), but our wireless network often doesn't achieve those speeds and/or is subject to interference from neighbor's phone, microwave, etc. I'd like to figure out what equipment upgrades I can make that will increase the performance of our current network, and also allow us to stream video from iMac/Macbook to the PS3.
What equipment upgrades would you make and why? Thanks for the suggestions.

Welcome to the discussions!
In a nutshell, the best "equipment upgrade" would be in your wiring.
Is it possible to connect the PS3 and any other devices directly to the AEBS using ethernet? Your computers need to connect via ethernet as well if you are looking for the best network performance.
If you can't run the ethernet cable, take a look at ethernet powerline adapters. These won't work as well as a dedicated ethernet run...but they would be much faster and a lot more reliable than wireless.
Although you have the PS3 now connected to the ethernet port on the AX, the signal still must pass via wireless from the AEBS to the AX. There's a 10-20% bandwidth loss in the "extend a wireless network" transition and even more bandwidth loss again in the wireless back to ethernet transition. Don't mean to be critical, but this the slowest hookup you could choose. It would be faster if you simply allowed the PS3 to connect to the AX using wireless.
Wireless airspace is already overcrowded and will get much worse. Not much hope there, I'm afraid. 5 GHz wireless signals may offer a bit of relief from interference, but the signals do not travel or penetrate as effectively as 2.4 GHz, so it's almost a "line of sight" type of thing. I'm not sure if the PS3 would even handle 5 GHz or not. Might be worth experimenting a bit if it does.
Bottom line, your equipment is fine. A faster internet service would help. You might look at cable if it is available in your area.

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