I don't know that it will support WDS with 3rd party routers, but there is something like WDS between Airport Extreme and Express products, so your setup should work as long as the networking hardware is all Apple.
edit: The Airport Express page still says:
Suppose you want to connect to the Internet with your MacBook in an area that lies beyond the 150-foot range of your AirPort Express or AirPort Extreme Base Station. You can use AirPort Express as a wireless bridge to extend the range of your primary base station.
Which may be an oversight, or may still be true.
Naming two generations of products the same thing is a crummy idea.