Adding Range Extender - IP Address Problems

Hi,

I have recently tried to add a range extender to my wireless network so that it covers my whole house. I have tried to set it all up from my XP desktop.
It all works fine whilst the range extender is plugged into the router via an Ethernet cable, but when i unattach them the PC cannot properly connect to the range extender, even though it is rebroadcasting the network.
Please can somebody help me work out what has gone wrong and get the range extender up and running?
I know my post is very long, but i know that people get frustrated when too little information is posted...

Devices -

Windows XP PC with Bluenext BN-WD54G wireless dongle
US Robotics USR9111 Wireless Router
US robotics USR5441 MaxG Wireless range extender

Settings -

PC TCP/IP Protocol Properties -
General - Obtain IP Address Automatically - Enabled
General - Obtain DNS Server Address Automatically - Enabled
Alternate - Automatic Private IP Adress - Enabled

PC Connection -
Connecting to Wireless Network using a Bluenext BN-WD54G wireless connector and the bundled wireless connection utility

Wireless Router -
SSID = NEWTJ
SSID Broadcast = Enabled
Wireless Mode = 11G Only
Channel = 4
MAC Filtering Disabled
Security = WPA (not WPA2)
Cypher Suite = AES
Authentification = Pre Shared Key - Passphrase
WDS = Enabled
Beacon interval = 100
DTIM Interval = 1
Fragmentation Threshold = 2346
RTS Threshold = 2347
CTS Protection = Auto
WMM Mode = Disable
DHCP Server = Enabled
IP Address = 192.168.2.1
Subnet Mask = 255.255.255.1
Runtime code Version = 1.06 (Latest Firmware)

Range Extender -
Network SSID = NEWTJ
SSID Broadcast = Enabled
Security Method = WPA PSK(AES)
'Plan to extend Network Further' option = Disabled
Beacon Interval = 100
RTS Threshold = 2347
Fragmentation Threshold = 2346
DTIM interval = 1
Preamble = Long
Firmware = 3.91.37.0.3 (Latest)
Access Point shown as correct MAC address of the router and ticked to show an active WDS link.

Scenarios -

1. Before the range extender was added to the network -

Could connect to the internet via the USR9111 router.
Could view the Router homepage as 192.168.2.1
The IP address (192.168.2.1) was shown as having been assigned by DHCP

2. With the Range Extender connected to the Router via an Ethernet Cable and set up as above, but nothing connected to the PC -

Could connect to the internet via the USR9111 router
Could view the Router homepage as 192.168.2.1 and the range extender homepage as 192.168.2.3
The IP address (192.168.2.1) was shown as having been assigned by DHCP

Could connect to the internet via the USR5441 Range Extender
Could view the Router homepage as 192.168.2.1 and the range extender homepage as 192.168.2.3
The IP address (192.168.2.2) was shown as having been assigned by DHCP

3. With the router, range extender and PC not physically connected and all working wirelessly -

Could connect to the internet via the USR9111 router
Could view the Router homepage as 192.168.2.1 BUT COULD NOT SEE THE RANGE EXTENDER HOMPAGE VIA 192.168.2.3
The IP address (192.168.2.2) was shown as having been assigned by DHCP

When connecting to the network via the USR5441 Range Extender the following happens -

Connection status says 'Acquiring Network address' for approximately 1 minute
Connection Status says 'Connected' and The IP address 192.168.2.2 is shown as having been assigned by DHCP for approximately 5 seconds
The status then says ' Limited or no connectivity' and the IP address is shown as being - 'Automatic Private Address'

i have no internet and cannot access the homepage of either the Router or the Range Extender.

I then dutifully click on repair -

Disabling wireless adapter - 5 seconds
Enabling wireless adapter - 5 seconds
Connecting to wireless network - 2 minutes
Could not connect

Thanks again,
Tom