Airport Extreme not recognizing Airport Express

My PC, running XP, is connected via ethernet to an Airport Extreme BS. I picked up an Airport Express today and plugged it into my stereo to use AirTunes. Problem is, my Extreme is not recognizing my express... it just keeps blinking orange. I disabled wireless security. I've downloaded the newest firmware to the Airport Extreme. I enabled WDS and added the Express' MAC address to the client list.. Still nothing. I'm sure I must be an idiot as Apple advertises this a simple hookup. Any help is appreciated.

The only 2 things I can think of:

1) plug the Express in near the Extreme during set up -- I read somewhere that this was important (as long as it's within range it shoudn't matter, IMO).

2) Try not using ethernet on the Extreme during setup. When I set up my Extreme/Express from my iBook, I seem to recall having trouble until I went wireless from the iBook to the Extreme during setup -- could have been purely coincidental but when I unlplugged the ethernet set up proceeded smoothly.