Seting up Airport Express with Pace 4111N modem/wiresless router SOLUTION
I am posting this so hopefully this will save others from the pain of trying to figure this out...I have older Airport Express G, but this should also work for the newer N ones. Problem was that each time I tried to configure the AE it would die at the end step "setting up configuration" and I would lose access and had to keep doing resets. Here is how I solved this. Have on hand ethernet cable, paper clip for resetting.
I'm on 10.7 but I prefer the older airport utility 5.6. and with the older AE's I had to use it. You can download it here:
http://support.apple.com/kb/DL1536?viewlocale=en_US&locale=en_US and it's safe to have side by side with the newer default Lion airport utility.
1. Do a factory reset of your AE by inserting paperclip into little reset button, plugging in the AE and then keep the button pressed until you see rapid flashing. (perhaps not required but I like to start clean).
2. Go into your router control panel for my router that's 192.168.1.254. But you can find your IP on a sticker on your actual modem.
3. Set the Wireless password type on your modem/router to WPA2-PSK (AES).
4. save configuration
5. I like to connect to my AE via ethernet for setup, if you do too, then plug your AE to your machine via an ethernet cable. 6. Launch Airport Utility 5.6
7. Select the AE and setup as usual.
the key to the solution is that your AT&T router/modem wireless password is WPA2-PSK (AES).
(note this is for simply extending your network or using your AE to play music, not for using the AE as an independent router).