There are several ways to extend an Airport Extreme wireless network. The easiest way is to work with what you have first before thinking of getting more hardware, like another Airport to extend the network. It’s easy to add another Airport to a wireless network, but it’s always best to work with what you have first.
See if you can put the Airport Extreme in a better location to minimize interference from cordless phones and home walls and try and put the Airport father above the floor on a shelf to send the signal farther. If there is a kitchen or bathroom in between the Airport and your iMac, that might be the cause of the problem. Tile, plumbing, lots of electrical cable in the wall – and of course metal things like refrigerators and stoves – will greatly reduce your iMac’s reception.
But if you can move the Airport to work around interference, you’ll get much better reception. You might need a longer ethernet cable from your DSL or cable modem, or you can move the modem and the Airport to a better spot.
Another thing to do is use Airport Utility to check your Airport Extreme and see if there is a software update for it, and also be sureyour iMac is up to date, too, as there are software fixes available for wireless reception.
If noe of those things work, the other way to extend the network is to use a second wireless router as a relay station. That’s called WDS – Wireless Distribution System – and that capability is built into Airports. And you can use an Airport Express to act as a relay station (you don’t need another Airport Extreme unless the Airport Express turns out to not have enough power.) You can get an Airport Express at local big box stores that carry Apple products, or order from many places online and directly from Apple: AirPort Express Base Station.
The setup is very easy, and Airport Utility will walk you through it. Plug the Airport Express in and start up Airport Utility. The utility will find the new Airport Express and then you can start the setup. You might want to put the Express in a hallway or in a good spot that has a direct line towards both your iMac and the Airport Extreme.
Apple has some documentation about WDS and the Airport Express: see AirPort Utility 5.1 Help: Extending the range of your wireless network.
Because of the way WDS works, every jump your network takes with a WDS relay station will halve your overall wireless rate, but if you can get better than two bars of reception at your iMac, I think the better reception will make up for the lower overall speed.