I plan to replace the Airport Express with a newer Express and replace the Airport Extreme with a Time Capsule. Ideally the network setup would remain the same, with straight swap-outs of the units. However, I have been given conflicting information regarding whether a Time Capsule can or cannot be used to extend a network in this way (ie. whether or not it can be used to extend a network in which the main router is an Airport Express).
Any Apple "n" wireless router can "extend" the signal from any other Apple "n" wireless router. (Don't forget that a Time Capsule is an AirPort Extreme wilth a built-in hard drive).
My policy on answering questions is that I never answer one unless I've done it myself to verify.
In addition, you might want to refer to Apple's own Support Document linked below on extending....which anyone working at an Apple Store would have immediate access to with a few clicks at the computer:
Unfortunately, if someone at an Apple Store told you that the Time Capsule could not be used to "extend"......he was just wrong or too lazy to look up the answer, so he made one up. You might want to show him his own support document...and then talk to another sales guy there when you need product information.
AirPort Express 802.11n (1st Generation), AirPort Extreme 802.11n (1st Generation), AirPort Extreme 802.11n (3rd Generation), Time Capsule 802.11n (1st Generation), Time Capsule 802.11n (2nd Generation), Time Capsule 802.11n (3rd Generation)
Good luck on your consensus building.