Airport Express slow or showing a 169.x.x.x address?

You aren’t alone.  An extensive discussion of this problem and other experiences with Apple Express/Extreme hardware at this Macintouch thread. Sammy Banos is typical of people who had this problem and suggested a workaround:

I too updated my Airport Express to firmware 7.5.2 yesterday evening. I’m using the AE as “connected to an existant wireless network“, giving the AE a static IP adress. As you may have guessed, I too experienced the IP changed to the APIPA thing, ie 169.x.x.x.

After going through some forums it appears that this configuration (join wireless network, static IP) is the troublemaker… added to the performance issues other experienced.

My best advice is to stay away from that 7.5.2 firmware and expect Apple hear our pleas (their forum is already filled up on the problem) and release a corrective firmware.
For those who already upgraded, revert to 7.4.2, and you should retrieve the Airport you first loved.