Setting up a large home network

I'll give it a shot.  

All of your routers/switches are connected by Ethernet cable to one another, no wireless except to connect phones and laptops, right?

First, some basic stuff. Only one DHCP server at router 1 (which you have done), Router 2 is an access point so yes it must have a static address assigned in it and in router 1's static assignment table. Both routers must use the same wireless SSID and security and encryption types (so WPA2 with AES), both routers should use different radio channels (selecting from these 3: 1,6,11). Router 2 should not have anything attached to its WAN port -- only its LAN ports.

Preferably, everything will automatically get an IP address from the gateway, which will be 192.168.1.1 since your AP is addressed at 192.168.1.151. You can use reserved dynamic addresses if you wish in the router (doesn't matter but TV sets, DVD players and printers may want a "static address" that is the same as a reserved dynamic in the router pretty much).

All computers will have the same workgroup name.

All of your cables have been tested somehow?

Ok so i dont have a static ip address assigned to the second router in router one. Is there anything special i have to do since the two are connected through a switch? Also, yes, everything is wired except for a couple of laptops and smartphones.

Nothing special, just go into Router 1's configuration pages and set the same address in the static settings using the router 2's MAC address.

That may be a big part of your issues. The main router DHCP was assigning the AP a different IP from the static one in router 2 and nothing could connect through it to the main router.

Once that is done router 2 (aka the AP) will allow all of its wireless clients to connect and also the things that are attached to its LAN ports (besides the main router connection).

Honestly, your network configuration is quite confusing in the way it is described. Here is as best I understand it.

modem
-router1 linksys E1000 Wireless N300 / 10/100 wired.
|-switch1 10/100 5 port desktop switch.. by your description I have to assume this is cabled to router1, so only 4 ports usable.
||-direct-tv box. Hung off of switch1
||-blu-ray player. Hung off of switch1
||-xbox 360 Hung off of switch1
||-computer(windows xp) Hung off of switch1
||-computer(windows 7, 64 bit) Somehow magically hung off of a non existent port on switch1
||-computer(windows xp) Somehow magically hung off of a non existent port on switch1
||-router2. Assuming hung off of ethernet port on router1.
|||-switch2 Assuming hung off of router2
||||-blu-ray player Assuming hung off of switch2
||||-direct tv box Assuming hung off of switch2
||||-computer(windows 7, 64 bit) Assuming hung off of switch2
||||-computer(windows xp) Assuming hung off of switch2
||||-switch3(has yet to be purchased) Assuming hung off of router2, but that could be a bad assumption.
|||||-Wii. You didn't mention wired, or WiFi. By default the Wii is WiFi, wired is additional hardware.
|||||-xbox 360. Assuming hung off of switch3 router2
|||||-computer(windows 7, 64 bit) Assuming hung off of switch3 router2.

I am assuming for some reason you want to separate your home into 2 separate networks, if that is the case, the inability to access from one side to the other makes perfect sense.
However, if you want a network that is going to perform well for everything attached to it, I would...

#1. Lose the routers with the fast ethernet connections. The Cisco / Linksys EA2700 has a 4 port gig switch built in, and MUCH better radio than the E1000 (I replaced my old E1000 with an EA2700, gave the E1000 to our nephew). No joke, the EA2700 runs around $80.00 these days. Upgrade on the cheap, reset to factory settings and sell the older routers for say $30.00 each on Craigslist and call it good
#2. The stack of switches. One big switch is going to move data MUCH better than a stack of switches. I see you have a total of 13 possible wired devices IF you got the wired ethernet adapter for the Wii, your xboxes are wired, and none of those PCs etc.. are WiFi. A 16 port switch, even a 10/100 switch would provide FAR superior speed, and reliability, not to mention lower costs in terms of energy usage etc...
If you want to stay with Cisco / Linksys, be prepared to pay for the name branding, because a 16 port gigabit switch from them runs $219.00 on Amazon. TrendNET, XyXel, TP-Link, Edimax and others offer quality 16 port gigabit switches for under $100.00. Due to prior experience in relatively abusive commercial applications I opted for the TrendNET TEG-S16Dg (the metal casing one that can be rack mounted).
#3. As needed, or desired, upgrade your wired ethernet controllers to gigabit controllers. NICs with the Realtek chipset are CHEAP and reliable. Pretty much all modern operating systems see them with no trouble.

So you would have the following setup.

Modem (cable / dsl)
|-Router. Cisco / Linksys EA2700 or similar. (There are MUCH nicer models, but this is a good starting point.)
||-TrendNET TEG-S16Dg, or similar 16 port Gigabit ethernet switch. Pick a port to connect via a cat 5e cable to the router. For our purposes, I am going to call this port 1.
|||-direct-tv box. Switch port 2
|||-blu-ray player. Switch port 3
|||-xbox 360. Switch port 4
|||-computer(windows xp). Switch port 5
|||-computer(windows 7, 64 bit). Switch port 6
|||-computer(windows xp). Switch port 7
|||-blu-ray player. Switch port 8
|||-direct tv box.Switch port 9
|||-computer(windows 7, 64 bit).Switch port 10
|||-computer(windows xp).Switch port 11
|||-Wii. Switch port 12
|||-xbox 360. Switch port 13
|||-computer(windows 7, 64 bit). Switch port 14

Now let's assume that fast ethernet for your entire network is fast enough, and you won't run into any stuttering video, or gameplay lag problems by sharing that bandwidth (your inetnet connection is the bottlneck anyway, you really only need gig ethernet if you are doing a LOT of big file moving inside your network) you can keep the E1000 router, hang a Cisco-Linksys EZXS16W EtherFast 10/100 16-Port Workgroup Switch off of it and connect the same way I listed above. Grand total for this is about $60.00.

Modem (cable / dsl)
|-Router. Cisco-Linksys E1000.
||-Cisco-Linksys EZXS16W Pick a port to connect via a cat 5e cable to the router. For our purposes, I am going to call this port 1.
|||-direct-tv box. Switch port 2
|||-blu-ray player. Switch port 3
|||-xbox 360. Switch port 4
|||-computer(windows xp). Switch port 5
|||-computer(windows 7, 64 bit). Switch port 6
|||-computer(windows xp). Switch port 7
|||-blu-ray player. Switch port 8
|||-direct tv box.Switch port 9
|||-computer(windows 7, 64 bit).Switch port 10
|||-computer(windows xp).Switch port 11
|||-Wii. Switch port 12
|||-xbox 360. Switch port 13
|||-computer(windows 7, 64 bit). Switch port 14

Now your router configuration needs to be set up to allow the connections, so any custom settings you have with access restrictions might need to be looked at, but basically, get everything on your 192.168.x.x network.

At this point, the only other issue I could think of is port forwarding for the gaming on the xbox 360s as I understand they may have connection attempts incoming, instead of outgoing / established. You will need to check with someone that knows a bit more about xboxes than me...