The term basic service set (BSS) is IEEE standards jargon for a wireless network containing only a single wireless access point. Fig 1 shows a basic service set.
The vast majority of small office and home office networks fall into the BSS category, since the range of a typical access point or wireless gateway is designed to "fill" a typical residence or small office.
In a larger office, or a large and oddily-shaped residence, a single access point may not provide coverage "out to the corners." The overall 802.11 standard provides for a network in which multiple access points are connected to the wired portion of the network, operating from the same router. Such as network is called an extended service set (ESS). The basic idea of an ESS is shown in Fig 2.
Here, there are two access points, but both have the same SSID. This is a crucial point; remember that the SSID is the identifier of the network, not the access point! The coverage of the two access points is shown by the gray clouds. For clarity, the clouds do not overlap in the figure, but in practice they should overlap slightly to avoid "dead spots" in the middle of the home or office.
Note that both access points are managed by the same router. That's key: Unless you're willing to do some really serious mucking around, all access points in an ESS must be addressed within a single subnet, and a subnet is almost by definition controlled by a single router. This usually means reconfiguring all access points to request IP addresses from a central DHCP server, rather than using the preset local IP addreses written into access point firmware at the factory.
Setting up an ESS may seem straightforward, but there are technical issues that just don't arise in setting up a basic service set. The first is service area overlap and channel interference. To avoid interference among the several access points, channels must be assigned to access points such that overlapping channels are not used by access points with overlapping service areas. There are only three channels in the American 2.4Ghz Wi-Fi channel set that may be used simultaneously without overlap: 1,6, and 11. If your ESS can be function with only three access points, do your best to make it so,and use those three channels. Once you go beyond three, you have to take the spatial relationships of the access points into account to avoid having one access point interfere with another.
Figure 3 shows how to avoid channel conflicts when using multiple access points to fill a large rectangular office space. In the example,five access points are used, all of them on one of the three non-overlapping channels. Note that nowhere do two fields intersect on the same channel. Theoretically, you can fill a space of any arbitrary size with only these three channels, and not have any fields overlap on the same channel. In practice, difference in field strength due to building shape and construction will still give you dead spots and occassional areas where two fields of the same channel are strong enough to conflict.
In other words, setting up an ESS with more than three access points is more art than science.