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Background: I am considering an Airport Express (AE) to my room, but I am getting confusing information about how it can operate in different circumstances. I already have a router, with WiFi and LAN ports. The AE would be connected by cable to currently owned router and I would also like to connect my Mac by wire to the AE.

Question: What I want to do is extend WiFi signal in our flat and also have the possibility to use my speakers wirelessly. Is it possible with the current AE?

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Yes you can use the Airport Express to extend the wifi signal from your other router: You just have to change the settings for your device in the Aiport utility to extend a network instead of creating a new one.

http://support.apple.com/kb/HT4145#

Yes you can use your speakers wirelessly. You just need to connect them to Airport Express. Apples technique is called Airplay: https://www.apple.com/airportexpress/

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Let's make it a bit cleaner ;) apple.stackexchange.com/questions/79969/… –  Mailo Jan 25 '13 at 14:48
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