I have a first generation Airport Express which has been unreliable for years, frequently dropping connections or failing to play despite being connected (green light on) to the network. I recently purchased a new ADSL-wifi router (D-Link 2740U) in the hope that it would resolve various other network reliability problems that have arisen with my 10-year-old Netgear DG340 ADSL router. It was extremely frustrating then, to discover that although the new router had indeed made for a more stable network connection, my Airport Express continued to drop out.
I have, however, found a fix – limiting the wifi netork to 802.11B+G bands only, and excluding 802.11N, a setting which is found on the router.
(Perhaps if my ADSL connection were faster and my home bigger, this would limit my download speeds and network range, but since my broadband connection is only 1.72 mbit/s, and the 802.11G standard allows speeds up to 54 mbit/s, that is not a problem for me.)