Odds are the way you are routing it through the computer simply is not proper to allow a connection to the XBox. I've personally never set anything up that way, but i do have a sugestion.
Assuming you are running XP, go into your control panel (classic view) and run the Network Setup Wizard. Select the first of the 3 options detailing how the computer connects to the internet(this one seems right for
your situation). On teh next set you should see your USB router as the connection to the internet for your computer. If not, then select it. On the next step select your Ethernet port. Then yes it to death until it sets up your network.
That should work, if not, Microsoft likes screweing with people. Iff all else fail, run an ethernet cable to your router from the X box, or get another wireless adapter
