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Understand Internet Connection Sharing. Connect the devices. Enable Internet Connection Sharing (ICS). Turn on the Xbox 360.
Windows will forward your Internet connection to the attached device, in this case the Xbox 360. Use a standard Ethernet cable to connect the wireless PC to the Xbox 360. You should see a green connection light near your PC’s Ethernet port. Open your Network Connections manager. In Windows Vista/7 type ncpa.cpl into the search bar and click the result. In Windows XP, open the Control Panel and then select Network Connections.  Right-click on your wireless connection. Select Properties. In the Properties window, select the Sharing tab. Check the box next to “Allow other network users to connect through this computer’s Internet connection.” Uncheck the box below it. Click OK to save the changes. In Windows XP, you will need to click the Advanced tab, and then select Sharing. Navigate to settings and select Network Settings. Select Edit Settings open the IP Settings section. Ensure that the Xbox is set to obtain its IP address automatically. In the Network Settings menu, select Test Network Settings. A message should appear on your PC saying that a new local area connection was found and your Xbox 360 should be connected to Xbox LIVE.