I know Apple likes us to think everything works by magic, but…
To use Airplay one needs Airport Express. To backup wirelessly one needs Time Capsule. There is, in particular, no way to Airplay music through Time Capsule, as one can do with Airport Express. I hope there is a better reason for this than selling these two devices. (Note also that the 4th-gen AppleTV + Time Capsule are also not a satisfactory solution for those whose HiFi lacks HDMI.)
My question is: if one has both Airport Express and Time Capsule, what are the terms of their co-existence? Does one, for instance, get to choose which of the two is the wifi router? If one chooses Time Capsule, would Airport Express be using the same band (2.4GHz? 5GHz?) for transferring the music? Is the quality of Airplay affected if one is using the bandwidth to capacity?
Best Answer
You just extend the network created by one of the two devices. I.e. you start with the Time Capsule, making it create the WiFi. The AirPort Express then gets configured to just extend this network. If you've setup the Time Capsule to use the 5GHz band then yes, the Express will use that too.
It's effectively just one WiFi network (or two, if you count the 2.4GHz fallback for older/mobile devices) powered by both stations. All devices connected to that network have access to both stations and they will always get connected to the base station which is nearest. Here's this setting in the AirPort Utility:
When setting up a new network with the AirPort Utility you will be asked for this, so it's really easy and happens in two clicks/taps.
Apple also has a good support article on this: Wi-Fi base stations: Setting up and configuring an extended wireless network