|Just FYI, while waiting on deploying our Enterprise in-house Wireless project we are using SOHO level equipment to supply internet access only. We were using some D-Link AP's but have switched to Linksys WRT54GL routers running Tomato instead. So we are doing what you wish to do.|
Both devices are using a 128 bit hex wep key ( I know wpa2 is better, but anyone serious about security uses ssh, https or other protocol level security ). Both devices have the same key, ssid and channel.
First off, use WPA encryption. Our security guy can crack WEP in under 30 minutes. Using ssh and https does not stop someone from cracking your encryption and then accessing your LAN and/or using your wireless for nefarious purposes (ie: kiddie porn or firing off an attack at someone).
It's worth noting that should someone hack your wireless encryption and use it for their own nefarious purposes, it will be traced back to you. If you want to risk having to explain to police, the FBI, or whomever, "No, we weren't surfing kiddie porn, I'm just an idiot who didn't take good advice from a professional and therefore we got hacked" that's up to you. Personally, I'd rather not risk it.
Having said that. To use a Linksys WRT54 as an AP you plug your link from the Buffalo router into a LAN port on the unit (after it's configured of course) it will need an IP in the same subnet as the rest of your LAN but preferably one outside your DHCP scope so as to avoid duplicate IP's. It will need the exact same Subnet Mask, DNS and Gateway IP's as the other clients as well.
Once you have it setup correctly, it will function only as an AP. So make sure you disable DHCP on it.
You do want to put the AP on a different channel from the Buffalo wireless router. Put one on channel 1 and the other on 11 to avoid overlap and possible interference.
Can these routers be used as APs ? Is it reasonable to expect my laptop to associate with the nearest access point ?
It should connect to the strongest available signal. If not, force it to it.