READ THIS. This was asked a long time ago, but for anyone else who wants to do this, his set up is incorrect and should not work. Here is what to do, the easy, step by step answer. If you understand basic networking, you don't have to read my last paragraph, the important steps are as follows:
Main router, DHCP server ON, this allows the main router to distribute IP addresses to anything and everything. This router will have whatever IP address, for the sake of my answer, call it 192.168.0.1
ALL OTHER ROUTERS set to STATIC IP with DHCP server off. We don't want these routers handing out IP addresses. Set them to 192.168.0.2, 192.168.0.3, ... , 192.168.0.n, however many you have. Depending on the router, you can and should tell the main router to reserve these IP addresses. This is so the main router doesn't give your laptop the same IP address as your 2nd router, which would have an address of 192.168.0.2. Unfortunately, this varies greatly between models, so I can't really tell you how to do this. Trial and error; worst case, you just have to reset your router.
Set each router's channel 6 channels apart, except ones that are far enough. The ones farthest from each other can be set to channel 1, the one in the middle to channel 6. This is so the signals don't get mixed up. If you try to connect two routers wirelessly, then yes, keep them the same signal so they know how to communicate with each other. Wired, keep them 6 channels apart unless they are far enough to not interfere with each other.
set each router to the same SSID, the exact same encryption key and type. This is important. We need for them to replicate one another.
You don't have to read this, but if you want to know what's going on, read on: So the idea here is one router will do the job of handing out IP addresses to other devices. We are treating every OTHER router the same way as we are treating an iPhone, a laptop, or an XBOX 360. The main router hands out IP addresses. So the default gateway is like the standard route to the internet that ALL devices will take. No matter which router something is connected to, it will find it's way through all the cables and signals to the main router. In my example, the default gateway is 192.168.0.1. The default gateway is always the IP address of the main router. The subnet mask should be the same for all routers, for example 255.255.255.0. Each other router's IP address should have all the same blocks as the main one, as in my example, 192.168.0.2, etc. It's like a bunch of houses on the same block. We don't want other routers on a different block. You will find that this isn't always necessary, but if they aren't on the same numbering scheme, then you will not be able to access these routers' home pages. Once in a while, you might also get disconnected and not able to reconnect unless you renew your IP address. This is because your computer is trying to connect to one router, but it doesn't know how to switch to another router that has an IP address that's not on the same block as the one you got disconnected from.
Someone else referred to this setup as a repeater set up. This is not quite correct, because a repeater is, by definition, having a wireless signal REPEATED or extended by connecting wirelessly to the main router. Doing that is difficult unless you have custom firmware. It is easy as pie if you use the same, custom firmware on every router. But it's not always installing such firmware, and if your router is not compatible, you may brick your router. If you don't know what bricking a router is...well...think of a brick, how useful is it? I'll leave that to you. Also keep in mind that repeating a signal halves the bandwidth that you would get from your main router. There are other methods, such as client bridging, and WDS bridging. I'm not entirely sure about the signal quality and bandwidth allocation, but they are different from a repeater.
Remember, always try to adjust network settings for each router by connecting to it hard wired. This is because if you screw something up, you might not be able to connect wirelessly to that router again.
Thank you for your quick replay. I am wondering if you can detail a little bit about how to setup "passing IP traffic through from the WAN port without NAT". Thanks. – Simon Guo – 2011-04-20T02:13:41.140
@Simon Guo: You're welcome. Some routers have a feature that allows you to make them operate in a "gateway" mode so that the single public "WAN" port then acts like a regular private "LAN" port. This is particularly useful in a corporate environment where a WiFi point needs to be set up to extend the private LAN over wireless without having to administer another pool of IP addresses. Typically NAT comes into the picture as a means to isolate uninvited public WAN traffic from the private LAN (the default mode for these broadband routers). I hope that helps. – Randolf Richardson – 2011-04-20T05:36:56.500