Turn off all encryption and MAC filtering on your router. Put your router on the current/default channel used by the WRE54G. Then, confiruge the WRE54G without encryption first. (I don't use the button on the WRE54G; I just confirgue it by going to 192.168.1.240) Test.
Whatever you try to change on your network (encryption, broadcast channel), change it on the WRE54G first. Finally, unplug the WRE54G and then plug it in again. Wait for the red light to turn blue.
I have read through many of the chat threads and I am continuing to have problems getting my Linksys range expander to work. It seems that my problem is related to the wireless connection not makeing the gateway connection to my Billion Router. If I hardwire the router and Linksys expander via the available ethernet connection, I can successfully ping each device. However, the DHCP functions and dynamic IP addresses are still not right, therefore, no Internet connectivity. I am real open to suggestions. I've tried quite a few different configurations, including different channels, etc.