The Xbox 360 is the best console you can buy. Except it's inexplicably missing something the Wii and PS3 have: Wi-Fi. You could buy Microsoft's $90 dongle. Or you could follow our guide.
The Xbox 360's lack of Wi-Fi is a totally killer hardware flaw—if you're not right on top of your router, you've either gotta string miles of ethernet cable or buy that pricey ass dongle from Microsoft. Unless you check out one of the cheaper alternatives. Here's every major way to get your Xbox going on Wi-Fi, sorted by easiest to hardest (but most satisfying).
Dongles are, by far, the easiest way to get your Xbox 360 on a wireless network. But they also tend to be the priciest.
• Microsoft's official wireless adapter is $87, which is absolute horseshit for a Wi-Fi antenna attached to a USB cable. But it looks the nicest and is super easy to use—just plug and play. Update: This weekend you can get one for $69.
• Finally, your cheapest option is from...Microsoft. Turns out, a regular Xbox wireless adapter (which is a supercheap $50), works just fine, with a tiny bit of finagling: Don't put in its actual install CD. Just plug it in, and set your encryption. It might take two tries to get it to work, but it will. And, it won't eat up a USB port like the official Xbox 360 one. Spoiler alert: This is our pick for best option, based on its combo of cheapness and convenience, if you can find one.
Share Your Computer's Connection
Sharing your computer's connection is the cheapest option—it's actually the freest one. It'll work with a laptop or desktop, though a laptop is more truly wireless—the desktop bit is an option if your router's just a step too far out of the way. Basically, you're plugging your Xbox into the computer's ethernet port, and then having it use your computer's wireless connection to connect to the internet.
It's actually harder to reliably share the internet love on Windows with its cousin, the Xbox 360, than it is on a Mac: No method worked reliably for us across multiple Windows computers. But here's how it should work:
1. Share your computer's wireless connection. Microsoft actually details the process here, and it's pretty easy. From the Network and Sharing center, click on the manage network connections option on the left. From there, right click on the connect you wanna share (probably wireless, unless you're daisy-chaining 'cause your box just won't reach) and hit properties. Under the sharing tab, just check the box to allow that connection to be shared. Plug your Xbox into the ethernet port.
2. There are a few other ways to proceed at this point, and you're probably going to have try at least a couple of them to find one that'll work. You could bridge the two connections (dicey), or you could manually assign the ethernet port an IP address, detailed here (PDF). This Instructable relies on automagicalness to resolve the settings, and I have had that work in the past, though not when I was sorting through methods for this how to.
All in all, expect to do some Googling and troubleshooting if you go the Windows route.
You'd think this would be easy, 'cause I heard somewhere that Macs just work, and internet sharing on Macs typically ain't hard, but there is a tiny bit of jujitsu involved here. This method, from Joystiq, is the most reliable one I used.
1. On your Mac, pop open Terminal, and type "ifconfig en0" (number zero, no quotes). A whole bunch of crap will pop up. Find where it says "inet 192.xxx.x.xxx" (it should be 192, anyway). Write that junk down. It will probably be 192.168.2.1, like mine. Also find out your router's IP address, which is most likely 192.168.1.1 (Linksys) or 192.168.0.1 (D-Link uses this), depending on your manufacturer. If you have Apple's Airport gear, the router will be at 10.0.1.1.
2. Then plug your Xbox 360 into your Mac, open up Sharing in Preferences. Turn on internet sharing, and share your Airport's internet connection with ethernet.
3. On the Xbox, flip to your network settings (under system settings), and enter the IP address you got from the terminal freaky deaky earlier but + 1, like 192.168.2.2 to my original 192.168.2.1. Subnet should be 255.255.255.0, and then set your gateway as the ifconfig number, 192.168.2.1. Under DNS (back one screen, then down), put in your router's actual address for both. Test your Xbox Live connection. Your NAT might suck, but you can get on Xbox Live.
Hack Your Router
This method is the least straightforward, and requires a little bit of work on your part. Essentially, you're buying a second router (a cheap one, for about $40) and installing custom software on it that turns it into a giant wireless antenna that's hooked up to your Xbox 360.
There are tons of Linux custom firmwares for routers nowadays, with DD-WRT and Tomato being the most popular. Tomato is a bit more user friendly, but it works with far fewer routers than DD-WRT. DD-WRT works with dozens of different routers (click for the list).
Whichever firmware you go with, the method for putting on your router will vary from device to device, with Buffalo routers being a notorious pain in the ass. Tomato includes instructions with the firmware download—but here are some of the details, and Lifehacker's complete guide to installing and using Tomato.
DD-WRT is my preferred firmware. Here are the detailed install instructions, but with most Linksys routers, you can just drill into the router settings from the web address (192.168.1.1) and upload the DD-WRT firmware, directly, making it pretty easy. But some routers require different, exceptionally specific install methods. So check out the list before you run out to Best Buy or Circuit City.
My preferred router for this because of its tininess and cheapness (under $40), was the Buffalo G-125, which required you to flash it over TFTP backdoor the DD-WRT firmware onto it during a brief window of time, like Luke dropping those bombs into the Death Star's vent shaft. It's a pain in the ass, but everything else about the Buffalo routers make it worth it. Unfortunately, you can't buy it in the States until the next month or so, so your cheapest bet is is Linksys's $40ish WRT54G, which unfortunately, has different install methods depending on the revision. The DD-WRT wiki is very good, so you shouldn't run into problems following it.
Once you get either firmware installed, you're going to set your hacked router up as a wireless client.
1. You're going to need to go into the hacked router's settings. Set the hacked router to client mode.
2. These numbers are going to vary slightly based on your router, but you need to assign it an IP address—if your main router's IP address is 192.168.0.1, set your hacked router at 192.168.0.2 or 192.168.0.101 (a number that's in your main router's DHCP server range). Then make the gateway and DNS the same IP address as your main router.
3. When it reboots you're gonna have to re-login to whatever IP address your hacked router is. Do that, go back in, and give the hacked router the same SSID (name) as your main router (Linksys, gizrox, whatever you have it named). You can also configure wireless security at this point, though for me, it's always been kind of flaky, WEP in particular, so you might have to play around to see what works.
4. To test, try to get online using the hacked router as your internet connection, with all of your computer's IP settings left on automatic. If it works, plug the hacked router into your Xbox. If not, check out the DD-WRT wiki for more halpz.
4. On your Xbox, you can leave everything set to automatic—the hacked router does all the work.
The hacked router method might take the longest, but at least you won't have a useless dongle when the Xbox 720 comes out, you'll have a full-featured router, and it's cheaper than the official dongle. Plus you'll have a feeling of accomplishment that will carry over to gaming, so you should kill a lot more people in Call of Duty.