Right now, you are thinking of your Westell Versalink as a wireless base station, your AirPort Express as a wireless base station, and your Powerbook as a client that must choose one or the other.
But, the trick is to make both your Powerbook and your AirPort Express connect wirelessly to the Westell Versalink base station, both as clients. Then the Powerbook will see the AirPort Express "through" or "by way of" the Westell Versalink.
These instructions might be easier if you temporarily attach the AirPort Express to your Powerbook with an Ethernet cable. That way, if you go through any trial and error, you will still be able to "see" the AirPort Express from the Powerbook, without having to do any awkward resets of the AirPort Express with the ol' pen point or unbent paper clip technique.
In the AirPort Admin Utility, create a new profile from the menu in the lower left corner, with any name such as "Home Stereo." On the "AirPort" tab, change the "Wireless Mode" to "Join an Existing Wireless Node (Wireless Client)." For Network Name, enter the name (SID) given to your Westell Versalink. If you've enabled Wireless Security (WEP or WPA) on the Westell Versalink, click the Wireless Security button to enter the same password/key information you at some point entered on your Powerbook.
On the "Internet" tab, it should read "Connect Using: Wireless Network." Below that, the right setting is probably "Configure: Using DHCP," unless you've done something advanced with the setup of your Westell Versalink. On the "Music" tab, verify that "Enable AirTunes on this Base Station" is checked.
Click the "Update" button in the lower right corner. After 30 seconds, disconnect it from your Powerbook, unplug it from electricity, connect it to your stereo, and plug it back in to power. Get your Powerbook connected to the Internet through the Westell Versalink again (if you aren't), and within a minute or so you should also be able to see the AirPort Express in both the AirPort Admin Utility and in iTunes.
If you take your AirPort Express "on the road" on occasion, you will want to switch back to your original profile in the AirPort Admin Utility before unplugging it for travel, and have a short Ethernet cable in your bag in case you forget to switch back to the original profile before you leave.
With sufficient disposable income, you can link every speaker system, clock radio and USB printer in your home this way. With a Keyspan Express Remote, you can control the music without being in front of your Powerbook. Apple AirPort products are getting long in the tooth technologically, and they are priced sky high as wireless base stations go, but you can reduce the sticker shock a bit by checking the "Special Deals" page at the online Apple Store, asking at the counter of a retail Apple Store whether they have any returned or open box units in the back, or buying new or used units on eBay.
Note: The AirPort Express connected to the stereo has to be "in range" of (close enough to) the Westell Versalink's wireless network. If you can reach the Westell Versalink on a Powerbook from the location of the stereo, the AirPort Express is probably fine too. But it's not enough for just the Powerbook to "see" both the Westell Versalink and the AirPort Express when it's located halfway between the two. The AirPort Express and Westell Versalink have to be able to see each other, independent of the Powerbook.
These instructions allow you to use AirTunes via the Westell Versalink, but they won't extend the range of the Westell Versalink's Internet connection through the AirPort Express. That is, in this arrangement, the AirPort Express won't serve as a WDS, a relay, a repeater or an Internet access point for the Westell Versalink.
If you have further secured your Westell Versalink by restricting connections to just your Powerbook or a small group of computers, you will have to add the MAC address of the AirPort Express to the Westell Versalink's MAC Filter Table. The AirPort MAC Address is displayed in the "Base Station Chooser" window of the AirPort Admin Utility. Depending on the version, you might be able to reach the Westell Versalink's MAC Filter Table through your Web browser at "http://192.168.1.1/802_11_cfg.htm", or at "http://192.168.1.1/" and choosing "Configuration -> Wireless" and scrolling to the very bottom of the page.