As Alba_Joe says TKIP is more secure and from what you have listed your Buffalo supports TKIP.
Choose WPA-PSK as the Authentication and the option TKIP.
On the x51v you set it up for the same WPA and use the same phrase as on the router, otherwise router won't accepty traffic from the x51v.
As for encryption on the x51v I leave that to others - I use E-Wallet for stuff I don't want others to see but there are programmes available on the likes of handango to encrypt data. Try a search on these forums using the word encrypt or encryption and x51v.
For the difference between AES and TKIP try this link
TKIP vs AES.
TKIP will look like WEP in that you use a phrase - PSK stands for Pre Shared Key but it is a much more secure version than WES. Steve Gibson's site
GRC has a page where it would generate a
unique random code for use in cases like WPA (it explains a little about the length/strength) but you need to make sure you have a copy as the page would give you a new key if you went back to it. A lot of people I know use a phrase that they can remember - note: it is case and punctuation sensitive, you need to copy the phrase exactly when adding it to machines to get on to the network. Steve and Leo have a great IT security podcast available on the site called
Security Now.
What you have done works, it's just as you recognise there are a few more steps.