Here's how to do it:
_On the AirPort Extreme:_
Open AirPort Utility, click Manual Setup
Click the Wireless tab just below the row of icons
Wireless Mode should be "Create a wireless network" (It's probably already set this way)
Make sure there is a check mark next to "Allow this network to be extended"
Update to save settings
_On the AirPort Express:_
Open AirPort Utility, Click Manual Setup
Click the Wireless tab
Wireless Mode should be set to "Extend a wireless network". If you don't see this choice, hold down the "option" key when you click on the selection box
When you select "Extend.." your wireless network created by the TC will appear as a choice to extend. Select it and enter the wireless password.
Make sure there is a check mark next to "Allow wireless clients"
Update to save settings.
Whenever you plug the Express in, it will automatically "extend" the main wireless network from the Base Station. The ethernet port is "live" in this setup so you could connect an ethernet device if you wish.
But note...you cannot extend the "guest" network if you have a dual band AirPort Extreme. Only the "main" network can be extended. For more info, refer to the Designing AirPort Networks guide, pages 43-44.
http://manuals.info.apple.com/enUS/Apple_AirPort_NetworksEarly2009.pdf