The model numbers are as follows: A1254 and A1408.
The A1254 is a 1st generation Time Capsule (TC). They came out in 2009 and have not been very dependable. It is surprising that yours is still working for you. Most consumer networking hardware typically lasts around 5 years. These particular models had issues with their power supplies which shorten that time.
The A1408 is a 5th generation AirPort Extreme ... not an Express.
The A1408 is connected directly to the cable modem. I need two for the size of the house.
Are you using the older Time Capsule to extend the wireless range of the newer AirPort Extreme via a wireless connection between them?
At the cable modem, if I'm connected by ethernet, I can achieve speeds of 150mb. Over wireless, I'm getting 40MB.
Ethernet is almost always faster than wireless, but you should get reasonable speeds from wireless if the network is properly set up.
Do I need to replace the older airport?
I would recommend yes. If you are currently using it for Time Machine backups, you will want to get the latest generation 802.11ac model A1470. One thing to consider if you are using it for Time Machine, is that you will not be able to transfer the backups (easily) between the old & new TCs. It is always best to start a fresh backup when doing so. However, the process of replacing one with the other is easy using the AirPort Utility.
How should I configure them?
For best overall performance, you will want to connect them by Ethernet. If this is not possible or practical, then wireless would be the next best option. To get the best performance via that method, the placement of both base stations will be critical. To get an idea, please check out the following AirPort User tip for details of optimal placement.