Trouble with Airport Express setup after reset

This morning, I accidentally reset the AE to factory default (meant to do a soft reset). No problem, I thought. Just setup the AE again. And that's what I've been trying to do all day. I'm sure there's something very obvious that I'm doing wrong so I'll outline the steps I've taken.
1. Verified that DSL modem was active by connecting it to my Mac- good to go.
2. Disconnect from Mac. Connect DSL modem to AE via ethernet cable.
3 Plug in AE. Start up Airport Utility. Utility finds the AE, now named Base Station XXX
4. I name the base station and enter the password I want for it. Press continue.
5. The utility asks me what I want to do. I tell it I want to create a new network. Press continue.
6. Now it asks me what type of security I want. I tell it and create a password. Press continue.
And that's it. Pressing continue from this screen does not move the utility forward. Nor does it result in an error message. It just does nothing.
Is there another way to setup my AE and start a new network without the setup assistant?
Thanks for any advice. My desktop iMac is close by the DSL modem, but my wife uses her laptop in the house and we both enjoy our iPhones so wireless is important.

I've experienced this problem regularly for the past six months whenever there's a software update, and in my case, the problem always has been related to the Keychain. For some reason, the updates wreck the Keychain. Sometimes you'll get prompted to allow Airport to access the Keychain, but when that doesn't happen, you need to reset the Keychain.
If you're running 10.3.x, go to Keychain Access in Utilities, run Keychain First Aid (under Window menu). Choose “Options” and reset Keychain.
I really wish Apple would fix this issue. I've complained numerous times, with no resolution. They don't really want people to be afraid to update software, do they?
Good luck.
iMac and iBook   Mac OS X (10.3.9)  

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