Despite what lots of people say, you don't need to go out and buy a router to communicate with the Xbox. People tend to forget that you are able to use a Cat5 Cable to network devices such as the Xbox.
For those of you not familiar with Cat5 cables, they are basically the same as your normal ethernet cables, only the wires are mixed up in a different order. If you have the supplies to create your own ethernet cables (like me ) you can make a Cat5 cable. just follow the directions listed in this link.

For those of you that don't have access to a home networking kit, you can buy Cat5 cables at most electronic stores. Below are some links to online stores that carry them. I suggest Newegg.com, they are inexpensive and have very fast shipping.

Radioshack
Circuit City Kit
New Egg

Be sure to check out the other Newegg Cat5 cables, they sell it in a variety of lengths and all are great deals.

By purchasing a Cat5 cable for 3 bucks, you save yourself at least 20 dollars by not purchasing a router. It also helps save space, and doesn't require a power outlet. But I do still suggest that if you ever think that you will ever want a router, go ahead and buy a cheap router from Netgear of Linksys. Routers are great hardware firewalls and come in handy in the long run.