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HI you did not mention is you are able to use the unit even tho the led turns red. If not then the unit is drawing to much current and the power supply is shutting down. Or the power supply is faulty, If you can and know someone with a 360 system try to borrow theirs and see which part of the system is faulty if you know his is good and the same thing happens, or take yours to his house and try, but if same results then the 360 is at fault.
this happens to me with my adapter but I happen to get it to work by leaving it plugged in and leaving the xbox on.or i restart the xbox over and over. Mine seemes to have like a charge time so keep restarting and plugging the adapter in other ports.. It should after a while turn on. if not try another adapter because it may not be the adapter that's causing the problem. Your console may have bad ports.
The turning red means that it cannot connect to your network. If you are having trouble connecting it to your network then you are able to enter the details in manually. The WEP key should be on your router. Try entering this. Hope it helps.