Using a second AirPort Extreme: Many questions

I currently have the older A1143 AirPort Extreme (the first model with "draft N" capability). Have had it since 2007.
I want to get the newer APE model A1408 for better range, speed, and other improvements. This has the "final N" specs.
My questions are:
Can I use the older APE to extend the range of the new APE so that I have better coverage through the house?
Will using the older APE with its "draft N" spec downgrade the quality of the signal with the new APE?
Would I be better off to fork over the money for a new AirPort Express to work as a second router to extend the range of the new APE A1408? Or would the older A1143 Extreme be a better choice as a second router?
Is there a difference between "extending" with a second APE  and setting up a Wireless Distribution System? In other words, is "extending" the same thing as setting up a WDS?
If this is a good idea, any general advice on setup?
Sorry for all the questions. Thanks in advance for any help.

Can I use the older APE to extend the range of the new APE so that I have better coverage through the house?
Yes, with the note that your single band AirPort Extreme (AEBS) will only be able to extend one band...probably the 2.4 GHz band...of your dual band AEBS router.
Will using the older APE with its "draft N" spec downgrade the quality of the signal with the new APE?
No, the final "N" specifications adopted were essentially identical to "draft N"
Would I be better off to fork over the money for a new AirPort Express to work as a second router to extend the range of the new APE A1408? Or would the older A1143 Extreme be a better choice as a second router?
There would be no advantage other than possibly some size and space savings using the AirPort Express. In case you want to attach a remote hard drive to the device...you can do this with the AEBS, but not the AirPort Express (AX).
Is there a difference between "extending" with a second APE  and setting up a Wireless Distribution System? In other words, is "extending" the same thing as setting up a WDS?
You would definitely want to avoid using the older static WDS system because it only operates in "g" wireless mode...and on top of that, there would be a tremendous bandwidth penalty using this type of setup as well.
If this is a good idea, any general advice on setup?
Remember that the extending device can only "extend" the quality of signal that it receives if you are planning to try to configure things using wireless only. So, location is critical....ideally, you want line-of-sight or as close to that as possible between the "main" AEBS and the "extending" AEBS.
The "best" way to extend a wireless network is to connect the "main" and "extending" AEBS devices using a wired Ethernet cable connection, but that involves some drilling and other probable challenges.

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