Well, first of all, I would suggest you either move the WAP to a higher point or get an antenna that can be mounted at a higher spot. The location of the basement is causing much of your interference. A higher point allows you to get a broader range because of the way the signal is shaped.
As for the extender, I am wondering why you think the B card has anything to do with it. I am unfamiliar with the extender. Can you give me a manufacturer (I assume Linksys here and a model?

Are you in an older house by chance? I ask because some of the older building ran wire in the walls to support the insulation, typically chicken wire. This is important because the result is an environment similar to what you would find w/ a faraday cage. In addition, I agree w/ the above post. Move that WRT54G out of the basement, that is only going to cause you hassle.

Same thing happened to me. I was on linksys tech support for 50 mins. Try this:

1. Put the wre54G next to the WRT54g
2. Press the autoconfig button
3. go to http://192.168.1.240 (Address of the WRE54G)
4. Change the sysid to something else besides the sysid of your router (wrt54g)
5. Now save the settings and move the wre to location you had it and plug it in.
6. instead of using the sysid of the wrt54g use the sysid of the WRE on the computers that cannot directly access the WRT54G.