Ok i'm getting somewhere. Initially when using telnet I had wireless on the Thomson router disabled, hence the message...

So now that has been turned on and I have used the "wireless wds add" telnet command to add the MAC of my Airport Base station (which is a Time Capsule).

In the AirPort utility, I don't see the WDS error anymore, but I do have an Internet Connection error. Any idea what the settings should be in the "Internet Connection" section. More specifically:

Configure IPv4: "Using DHCP" or "Manually"
Connection Sharing: "Off (Bridge Mode) or "Distribute a range of IP addresses or "Share a public IP address"

And if not using DHCP (as suggested earlier) what IP address should I choose (and needs this be registered on the router?) and what DNS server?

I have been playing around to get it to work, but no success yet

Sorry to reply to my own posts, but i did get a step closer...
I also added the Ethernet MAC of the AirPort to the WDS list and now it works (also selecting "Manually" instead of "Using DHCP")
Only without security... WEP64bit doesn't seem to be supported by Apple for 802.11n, while I don't get WEP128bit or WPA2 working.
So might be able to downgrade to 802.11g and then use WEP64bit, but don't consider that a solution. Then I would prefer to use no encryption and MAC Access Control or so

Hi Tim
I have recently purchased an Airport express to extend the range of my Thomson 585. However, when the airport crashed the Apple help people told me that Airport will extend 3rd party wi fi.
I would appreciate if you could advise, or point me in the direction of, how I can set up my Thomson and my airport xpress to extend the range of my wi fi.
Thanks
Maximillian