I have a a one month old AirPort Express (wireless-N version) that has been acting flakey, and I tried to perform a factory default reset to no avail. So I called Apple Tech support, and they told me that not all Wireless-N versions of the AirPort Express follow the same factory reset procedure.
According the Apple tech note, to do a factory reset you are supposed to unplug the AirPort Express, and plug it in while holding down the reset button until the LED flashes green four times, then release the reset button. This did not work for me.
Instead, what I had to do was leave the AirPort Express plugged in, press and hold the reset button until the LED flashes amber rapidly. Now keep the reset button pressed in for at least 10 more seconds (I waited 30), and then release. This worked for me to reset my AirPort Express; I hope this helps someone else in the same situation.
Mac OS X Hints