Two AirPort Express questions

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macbook 2.0ghz santa rosa
2 questions about airport express. I am confused on how the airport express works. I have a plain jane wireless G router. What I want to do is plug an airport express behind my TV and run an audio cable to my home theatre and most importantly run an ethernet cable to my 360. I hear of people setting their airport express to WDS. So by doing that can I take the wireless signal from my router and route it to my 360 through the ethernet port? And then will my Macbook see the airport express as a wi-fi network or will I have to connect it to my modem for that.
 

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