As long-time readers of this blog will know, I have an extended wireless network. It now includes two daisy-chains and one spur: a daisy-chain on 802.11n (5GHz) with a TimeCapsule (which has internet connection from my ADSL modem/router) and two Extremes; a daisy-chain on 802.11g (2.5GHz) with older kit — two Extremes (one connected by ethernet to the remote end of the 802.11n chain) and three Expresses.
Autoconfigure was a welcome feature of the 802.11n Express. It was great — when it worked — but it was always flakey.
With the 7.4.1 firmware update my setup became completely unstable. In particular, whenever Time Machine started a backup the network would auto-reconfigure, and break. I had to use an ethernet connection direct to the Time Capsule to make a backup. I've now reverted to a manual setup of the WDS with explicit MAC numbers. All appears stable, my iPhone is back on WiFi and backup over wireless is working again.
If you're having problems with an autoconfigured wireless network, try going back to manually configured WDS. Use Airport Utility. First make a note of the Airport ID (MAC number) for each of your devices. Then, one-by-one switch from Create a Wireless Network or Extend a Wireless Network to Participate in a WDS Network. A WDS tab will appear. Under this tab you can see (and manually adjust) the autoconfigured setup. In my case I found that two Extremes were trying to act as WDS main.
As usual, be careful to update the various access points in an order that doesn't leave you unable to access some device over wireless. If you do get into that sorry state, a direct ethernet connection can be used to reconfigure the lost device.