Wi-Fi is not critical to connect to Xbox Live. Ethernet cable provides a much better connection with less lag and fewer drop outs.
You can pick up a longer ethernet cable for a fraction of the cost of Wi-Fi. Assuming the one included with the 360 is not long enough.
I prefer a direct ethernet cable with both the PS3 and 360. PS3 comes with Wi-Fi in built but the ethernet cable provides a less lag and fewer connection drop outs.







