It can be either, or both.
If you already have a wired network, you would configure the AirPort Extreme to "create a wireless network" and set its "connection sharing" to "Off (Bridge Mode)".
The applicable settings are shown here (ignore the "Music" icon; this is for an Express):
Configure IPv4 "Using DHCP". The other fields will populate themselves after it communicates with your router:
Give the network a name you recognize, and choose a Radio Mode appropriate for the devices that need it:
In the above, set the wireless channel to "automatic" unless you have a reason not to, and choose an appropriate security setting.
Click Update and let the Extreme reset itself. That's it!