Hi Charlie,
At the risk of confusing this further, but it looks to me like your main issue is you can't actually connect to the Airport Express unit to configure it to join the wireless network - is that right? If so, read on (otherwise ignore me). This is because, I just took delivery of my new AE unit to go into the kitchen, and have just set it up. This is how it should work:
1. Unplug your BT Home Hub for the moment and plug the AE into the power supply. Hold the reset button in for at least 5 seconds - you should see the amber light flash very fast to indicate it's been reset - the light will now just flash amber continuously.
2. You should then be able to see a new wireless network appear - in my case it was called Apple Network f8a22d - the last part will be randomly generated. To connect to it, do the following (I know we're using different version of OS X, but hopefully these screenshots will show enough to follow).
3. Open System Preferences.
4. Click on Network.
5. Highlight Airport and click Connect. The Internet Connect tool should open and, clicking the arrow next to the Network box should bring the list of available networks - your Apple one should be there.
6. Once you click on this, it should show you are connected. Closing the Internet Connect tool should show the Network status as the Airport connected to this network.
7. Finally, now open up the Airport Utility. The new base station should now show up in the list. You can then highlight and configure it.
Now I get the feeling, on step 5, you're not seeing any networks - is that the case? If so, then I think the AE unit must be faulty as it should definitely be as simple as above to get to the initial configuration of the unit. If you can get to the above stage, you can then follow the other guys' instructions to get the AE hooked into your existing wireless network (though remember to plug the BT Home Hub back in before you do this of course!!).
EDIT - updated instructions above as had to reset myself and noticed initial instructions were wrong!