LinkSys WRT54G as repeater/Extender?

Yes. Two ways to connect it:

1. Configure the 2nd WRT54G as an access point. Details and instructions on request or just search this group. Run an ethernet cable between the two WRT54G boxes between LAN ports. The WAN port on the 2nd WRT54G goes nowhere. You can mix and match SSID and channel assignments, but if you wanna try seamless roaming, they should both have the same SSID and be on the same channel.
2. Use WDS (wireless distribution service). This works the same way as the wired solution previous described, but without the ethernet cable. However, there is 50% reduction in maximum thruput going through the 2nd router via wireless. This should not be a problem if your backhaul (Cable or DSL) is much slower than your wireless connection. For WDS, both boxes will use the same SSID and channel.

I would be using the wireless option and would like to keep the G speed. Would going with the LinkSys G Extender be a better option then?

No. Range extenders or store and forward repeaters are a crap shoot and often don't work. Search for "range extender" or "repeater" in this newsgroups for all the "it doesn't work" horror stories. Even if they did work, they have the same speed reduction issue as the WDS bridge protocol, which is also simplex store and forward.

Be advised that the speed reduction is not as horrible as it sounds. Let's say you get a 24Mbit/sec connection between the two WRT54G routers. That will yield about 12Mbits/sec thruput to a wired computah plugged into the 2nd WRT54G. If your wireless client now connects to the 2nd WRT54G and gets the same 24Mbit/sec connection, you will see half again or 6Mbits/sec thruput. However, if your DSL connection is only 1.5Mbits/sec, the 12Mbits/sec is kinda wasted as your 1.5Mbits/sec maximum speed will be limited by the DSL and not by the wireless. As long as your wireless connections are faster than approximately: 1.5Mbits/sec x 2 for overhead and x 2 for WDS = 6 Mbits/sec then your wireless will not slow you down.

You can use WDS to infinitely extend the range, but each hop again cuts the speed in half. Eventually, you run out of speed. That's roughly why I thing mesh networks, with routinely do multiple store and forward wireless hops, are a bad idea.

This 10 page series of articles:

I ended up getting the LinkSys WRE54G Range Extender and it works wonderfully. I like that I can plug it into a wall outlet flush and it does support WPA (ver 2 fw). I did manual set up and had no problems.