If your AirPort Utility is not recognising your AirPort Express (e.g. a Model A1088) it may be the version of your AirPort Utility is (a bit bizarrely!) too new.
You may not even see an error message unless you connect using the AirPort Express Wifi and then use AirPort Utility to try and configure the base station. Here’s what you might see:
“This version of AirPort Utility doesn’t support this base station. Go to AirPort Service and Support for more information.”
In a nutshell, what you need to do is run version 5.6 of AirPort Utility.
For more detail, the newest AirPort Utility (version 6.x) only supports Wireless-N networks. See:
To return AirPort Express to the factory settings:
Use the end of a straightened paper clip to press and hold down the reset button for ten seconds.
and for the AirPort Express Setup Guide: