Every time I've read the manual of a product that allegedly offers WDS (you've read both yours, right?) it says there's no guarantee of interoperability with different products from the same vendor, let alone products from a different vendor. Do yours not say this?
I wish I knew why this was. But you may be heading for disappointment. Best of luck anyway.
"However, when connected to the Speedtouch upstairs, they can't get onto the
internet, only the LAN."
Can you define "connected" more precisely? Something is pingable, for example, and if so what is pingable - the Speedtouch, the Draytek, both? That actually sounds reasonably promising, if you've got the WiFi-layer stuff successfully connected, maybe there's something wrong with IP address setups and the like, which hopefully won't be too difficult to fix.
You might want to post IP address details of everything relevant on the LAN in this picture: IP address, subnet mask, default gateway, static/DHCP etc.