Adding a third Airport Extreme to a network

1- will I see much bounce if I replace the older router with a new one and use that as my extender?

Probably not. Maybe a bit, but nothing significant.

2- would I gain or lose by adding a third airport on the top floor? (old style or new? )

You can only wirelessly "extend" the network one time, so adding another AirPort would not accomplish anything. In other words, you won't lose anything....(other than money)....but you will not gain anything either.

Things would really improve if you could run an Ethernet cable from the new AirPort Extreme up to either the first or second floor and connect the other AirPort up at that point. Since there is no speed loss through the Ethernet cable, the AirPort would provide much faster performance.

Then, you could add yet another AirPort and have it extend from the "middle" AirPort. Again, Ethernet is best, but wireless might be OK.

Understand that the signal attenuation is due to the walls and floors as well as from adding additional users to the router in a shared signal environment. I doubt you would see any difference in signal strength unless you connected the extender to the main router via Ethernet and created a separate network on each floor.

Your alternative is to use non-Apple signal boosters such as the AmpEd 300, AmpEd 600, or AmpEd 1000 which provide actual signal boosting re-transmitters. I use one at home, but it's in conjunction with a non-Apple router, so I don't actually know how well they will work with an AEBS.

I had no idea you could only extend by one.

Just to clarify......you can have more that one device extending the network, but each extender must connect directly to the "main" AirPort......not to another device that is already extending the network.

So, that would mean that two extenders for example, could both extend the network if they were both located about the same distance from the "main" router.....AND.....both of them were closer to the "main" router than they were to each other.

If you connect extenders using Ethernet back to the "main" AirPort, you can locate the extenders wherever you want, since you don't have to worry about signal speed loss through the air, walls, ceilings, etc.