If you have an IP address conflict you will have problems. Let it configure itself by first turning everything off after setting your network settings on both computers on airport and automatic. (Unplug modem and router and shut down computers).
Next, plug in the modem and let it load up with all the lights. Next, plug in the router and let it do its thing.
Last, turn on your iMac and let it connect and make sure the internet works. Automatic - Airport should be enabled and will work its magic.
Last +1, turn on your Macbook and do the same. You shouldn't have anything manually done. Set on airport and automatic should take care of everything.