your description of the setup is correct. the unit comes with a cd/program that walks you through the setup, during which you identify for the adapter/extender the correct network (i.e., wireless router signal) it should be tapping into. It is easiest to set up if you have a laptop, such that you can run the program on the laptop, bring the laptop near the router, and connect the adapter/bridge to the laptop at the same time so that while you are running the setup program with the extender/adapter attached to the computer, you can make that identification. If you only have a wireless-equipped desktop, you might need to do a little back-and-forth to hook/unkook components (if I remember the steps correctly). Ultimately, though, you "cut the cords" and connect the ACIII to the ethernet adapter/extender via a cat 5 cable, and that adapter/extender then communicates wirelessly with the router.
It does take a few more steps to set up than the powerline-based approach (which is essentially plug-and-play), but you will get much better, stable communication and the steps are not hard at all if you follow the guide that comes with the unit.