Extreme is just a router, without AirTunes. Only Apple TV and Airport Express have the AirTunes feature. The Express can also act as DHCP router if required (Extreme has the faster CPU). AirTunes will work for any device you allow to connect by wireless or ethernet so whether you keep multiple iTunes libraries on multiple machines, all can broadcast (one stream per device at any one time) to any of the AirTunes enabled devices. A single stream can be broadcast to multiple remote AirTunes and locally connected audio hardware synchronously which makes audio around the entire house possible.
I have a Netgear DG834v4 in modem mode, an AEBSn as DHCP router with satellites Apple TV and Airport Express operating in different rooms. Apple TV can not be used as an internet access point though, just AirTunes but it can broadcast its own tunes to additional devices synchronously (just like iTunes on the Mac).
Edited by deleted (Sat 27-Dec-08 16:11:40)