IP ADRESS FAILED ON XBOX 360. TRIED 2 DIFFERENT

We had this same problem. Linksys was giving it an IP in the wrong network range, no default gateway (like a room with no out door), and no DNS. We had to manually configure it. I believe my router is going to be with our lord soon.
If you go into your Xbox network settings you can set a static IP. Choose one below the dHCP range. Our DHCP is 192.168.1.100-.200 so we assigned 192.168.1.50, subnet mask 255.255.255.0, default gateway 192.168.1.1 then go into your router settings and find the DNS it is connected to. (From your computer, type 192.168.1.1 into the address bar of your browser, go to status and you'll see primary dns, secondary dns.) Put those DNS values into the Xbox. Run the test again. It should work. The Connecting to XBox live test failed the first time, but we were able to play online games and download content, so I think it was just an artifact.
When Linky starts giving problems like this, it's probably having issues and may need to be replaced soon.

xbox configures the connection automatically as long as it is able to detect an internet connection(either wired or wireless). For wirless connections though, make sure xbox is using the correct security key or wep key for the wireless connection.