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Let's start with a picture of the network you are trying to create:
This could be accomplished by using AP#1 in repeater mode, or by creating a wireless bridge connection between AP#1 and AP#2.
An AP operating in repeater mode cuts spectral efficiency in half by retransmitting everything that it hears. In your case, AP#1 would be set to repeater mode, and AP#2 would be set to root mode - the default mode for most APs. Whenever a client transmits a packet, AP#1 will receive and retransmit that packet on the same channel so that AP#2 can hear it. Whenever AP#2 transmits a packet, AP#1 will receive and retransmit that packet on the same channel so that the clients can hear it. This set-up is easy to accomplish but it will also perform poorly unless traffic is relatively light.
An AP operating in bridge mode also retransmits traffic, but it does so over a dedicated wireless distribution system (WDS) connection. This configuration is common in business WLANs that use dual-radio APs. In that case, one AP#1 radio would operate in root mode, interacting with clients, using 802.11b/g. The second AP#1 radio would operate in bridge mode, relaying traffic to AP#2, preferably over 802.11a. This solution is clearly more efficient, but dual-radio APs are also more expensive.
Alternatively, some consumer APs support "WDS-AP" mode -- that is, a combination of root mode and bridge mode, using a single radio.
Finally, a word about the 400 meters between AP#1 and AP#2: you're not likely to cover that distance without adding high-gain antennas.
 To learn more about high-gain antennas, read this expert response from Lisa Phifer.
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