I would tend to think that either word would be an appropriate translation for the word transliterated 'hilasmos'.
Determining which word would be appropriate in context however, is a different story.
Propitiation has more to do with the one being appeased and expiation with the reason for the appeasment, although both aspects can be found in both words.
That is what makes this passage difficult. Both aspects are mentioned.
"My little children, I am writing these things to you so that you may not sin. But if anyone does sin, we have an advocate with the Father, Jesus Christ the righteous. He is the propitiation for our sins, and not for ours only but also for the sins of the whole world." (1Jo 2:1-2)In verse 1 we see Jesus as our advocate before the Father (the propitiatory aspect) and in verse 2 we see Jesus as the sacrifice for our sins (the expiatory aspect).
I would tend to translate the word, just like most other translations have translated it, as 'propitiation'. It seems to fit the context better since the main thought seems to be Jesus as our advocate before the Father.
Am I close?