Extending wireless network

This is one of the Apple WiFi devices strengths.

You have a few choices as to how to do this. You can still leave the Time Capsul being the only device plugged into the Ethernet cable. And add as many Airports to the network as you wish, this is known as a Wireless Distribution System (WDS). However, I would recommend wiring all the airports together with Ethernet. This is called a RADIUS - much stronger - offices use this.

Under either, you the admin is sheilded from having to remember what kind of nework you are seting up, all you do is sadd the devices, and tell the Time capsule (the master) to share its connection with the others.

If you do either right, you will only see one network in your Airport menu.

Disclosure:

I personally use a RADIUS network in my condo, my airports are all connected to each other with ethernet.

My parental units are using a noded WDS: one master airport connected to the AT&T router, two older "UFO" airports and an airport express. None of those latter three are plugged into anything but power, they just behave as WDS repeaters. Ergo the Master is called "Master", then the UFO's are "Repeater 1" and "Repeater 2", and the express is "Express". Trust me, when you have that many, logical names are best lest you confuse yourself.

Pro/Con
WDS
Pro: easily extensible, cheapest
Con: (significant) each node needs to be within reception of the Master. You cannot have one node use another node to "daisy chain" reception (or at least, I haven't been successful in getting this to work). There is one central point. This means there is a limit to how physically big your WDS can get. This can be a little finicky too, you could have node drop every now and then.

RADIUS
Pro: no physical size limit, very powerful, once set up, it's "Fire and forget", robust.
Con: requires each node to be wired with ethernet