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Timmah! said:
If you're getting 169.xxx.x.xxx, that's an automatic private IP. This means your Xbox is not getting anything from the router at all. Is this a router provided by your ISP, or is it one that you own? Have you done anything to change MTU size on the router? Have you tried resetting the router's settings to their factory defaults, then reconfiguring it?

Yes tried it all. It is a router we got with our voice telephone. Oh and Wireless is still working on the 360. MTU size isn't a problem either.