I am having problems in my setup. My setup is:

1. Router (Speedtouch 780) as an wireless hotspot and internet provider. Wireless network is WPA protected.
2. Switch wired to this router
3. Desktop PC (Win Vista) and other equipment - WHS, C200, Yamaha reciever... all wired to switch
4. Laptop (Win XP) and iPhone3GS connecting to wireless network from 1.
5. NEW: Airport express which I setup (using Airport utility installed on laptop) to join existing network from 1.

Everything (well almost everything) is working as expected - after setup AE joined the existing wireless and both laptop and iphone can recognize AE and stream Airtunes to it without problems.

Then I installed Airport Utility on my desktop (which is wired in the network) as I also want Airtunes from my desktop to home stereo, in fact this is most important to me as my desktop is my main home computer.
And here is where the problem started.
Airport utility and iTunes on my desktop can "see" and communicate with AE ONLY if my laptop is powered on and connected to wireless. If I turn off laptop or disable its wifi card, then I loose connectivity with AE from my desktop as well. So in order to use desktop to stream or configure AE I must also have laptop connected to same wireless AE is joining. How ridicilous is that?!

Even stranger is the fact by using option "Configure other..." in Airport utility on my desktop I can ALWAYS connect to AE by writing its IP address (which I made static to avoid the hasle) no matter if laptop is joined in wireless or not. But normal operation (recognition by scaning of Airport utility or iTunes streaming) works on my desktop only with laptop joined in the wireless.

I am going insane in working this out! It's as if my desktop is somehow accessing AE through my laptop's wireless which is not to be expected because desktop is WIRED with the switch and router. The subnet mast of all the equipment (AE, laptop, desktop) is the same which suggests that they are on the SAME network and should communicate with each other over the router which assigned them their addresses.

Please help...