AXE = Air Port Express or Extreme? There are way to many abbreviations and code words used in my life to keep track of them all.
I went out and purchased an Airport Express the first day they were available. It wouldn't reset and Apple overnighted me a new one, which has worked perfectly. I take it with me everywhere.
As for your question, it's hard to answer. What do you mean by "huge hit in performance "? Through put should not change unless there is a lot of destructive interference. A weaker signal shouldn’t matter. And the distance only slows the signal noticeably when your dealing with astronomical distances.
As for DSL v.s. your previous service, I don't know. You haven’t posted any data. As with all services, it depends primary on the service level. In my area, satellite is slow and spotty, cable good- when nobody else in the neighborhood is online, and dsl is good. If it is a choice between your cable provider and your phone company, which one is less evil? In my area, Sprint owns the main backbone in and out of the city. There is only one cable company with a few uplink dishes.
As for distance
Wireless signals tend to travel better vertically in many homes. This isn't because the laws of physics weren't enforced by the building authorities, but because walls often now have mettle studs, which absorb and reflect the wireless signal.
Get a program like
Kismac or
iStumbler or
MacStumbler so that you can get better metrics on your signal strength. iStumbler now has a Widget that connects to the program if your running it.
Kismac is my preferred wireless tool. A nearly static graph with 5 levels of information (as seen in the menubar) isn't as good as one that has the potential for hundreds of lines of resolution over time. You can find the "sweet" spots as well as dead spots in your house with these tools. You can find other networks that might be interfering. It might help you position your network hardware better. If you choose a directional antenna, which I think might be too much trouble if you have to hack your router and Airport, these tools will help you figure out how best to align it. It's also nice to have a good stumbler for when your out and about.
You might also tell your DSL provider that you need to have the DSL location in a particular spot. Often they can modify it. It does mean that you might have to put a DSL filter on all your analog phones. You will likely have to do that anyway.
As far as using your AEX as a bridge, Apple once noted that it was possible to extend a network across multiple Airports. That isn't supported anymore or perhaps was never supported beyond 1 airport.
