It is indeed very unfortunate that Apple has chosen to not to build Airport Utility 6.1 with the functionality of 5.6.1 rolled in to control older Airport Express units. It is obvious that the ApEx devices all work just fine under Lion/Mountain Lion when configured with AU 5.6.1.
Summarizing and adding a little to the discussion, here are the simple steps to take to get your older Airport Express units working under Lion/Mountain Lion at the moment:
(1) go download a copy of Apple Airport Utility 5.6.1 from CNET Download.com (Google for it) - it's hard to find on Apple's own software updates pages
(2) download Pacifist 3.0.8 from charlessoft.com and install it
(3) run Pacifist to get ONLY the Airport Express 5.6.1 app out of the installer package you downloaded. Don't worry about any of the other supporting files in the package installer. Put 5.6.1 on your Desktop and rename it with "561" or something like that after its name, and then drag it to your Utilities folder. You will need to authenticate several times under MLion. Whatever you do, make sure not to overwrite (delete) your Airport Utility 6.x.
(4) run 561 and do your thing. If it works right, consider doing step 5:
(5) go support Shareware and send $20 via Kagi for the use of Pacifist to register it in your name for future use. Disclosure: I have absolutely no connection to Pacifist, charlessoft, or the developer.
What I described above is exactly what I just did a few minutes ago on my 2011 MacBook Pro 15 under Mountain Lion 10.8 with an Airport Express I use for streaming my iTunes music in my outside kitchen.
take care all. and keep fingers crossed that Apple will fix up AU 6.x in the future to continue support of our most excellent and still useful Airport Expresses b, g, and n.