Basicially it's like the old Graphite Airport I had. It has one ethernet port. That port can do local ethernet bridging, or talk to a cable modem and NAT the connection. It however can't do both at the same time, since it only had one ethernet port. The advantage of the Airport Express in theory is that with the range extension, it could be used to do wired-wireless-wired if you have an Airport elsewhere in the house. The old Airport stations would never talk to another base station, just clients.

Newer Airports began shipping with "LAN" and "WAN" ports. Thus, cable modem if in use always goes into WAN, and local devices if used always go into LAN.

Bitt. It can do Airport range extension OR be it's own base station on the go. That way, it sees use at home on existing Airport networks, and is useful on the road.