Originally Posted by BeefyBen
Thanks guys! Had the same issue, found your posts via Google, worked like a charm. I registered on this forum for the sole purpose of thanking you. You've made this world a better place.
If anyone else is trying this, you can find Internet Connection Sharing by doing:
Start button -> Settings -> Network Connections
Right-click the appropriate connection (likely your Wireless one, duh)
Click the "Advanced Tab", and check that first box.
Reboot laptop & Xbox, make sure they're connected with a CROSSOVER ethernet cable (not the regular kind), and you should be good to go. This really rocks - you just transformed your laptop into a $110 peripheral for your Xbox.
You don't need an crossover cable, just a regular ethernet cable, plug one side into xbox, and other into laptop, choose your current network, go to properties, then the sharing tab, check the first box, when the drop down list shows up, select local area connection (that is the ethernet cable), then on xbox test xbox live connection, should work first time and viola!! Works for dongles too