This method worked for me, although there are several methods dotted around Mac forums on the net that seem to work for other people:
Before you start configuring, open up Terminal (in Applications -> Utilities) and type "ifconfig en0" (zero, not a capital-o). You're looking for the bit that says "inet xxx.xxx.xxx.xxx". In my case, the number I get here is 192.168.2.1
Second, note down the IP address of your wireless router, which in my case is 192.168.0.1
On your Mac
On your Xbox 360
- Connect your Mac to your wireless internet connection
- Connect your Xbox 360 to your Mac via Ethernet
- In System Preferences -> Sharing, enable Internet Sharing between your Airport and Ethernet connection
- Start up your Xbox and navigate to the Network settings menu
- Under IP address, enter the number you got from the "ifconfig en0" command earlier on, but with the final number one place higher. In my case, I take the 192.168.2.1, and input 192.168.2.2 in the IP address box on my Xbox 360.
- Under subnet, input 255.255.255.0
- Under router/gateway, enter the number you got earlier from the "ifconfig en0" command. In my case, that's "192.168.2.1"
- Move onto DNS. Enter the IP address of your wireless router (in my case, "192.168.0.1") in both the primary and secondary IP address fields
- Leave PPPoE and Advanced settings blank (i.e. OFF and Automatic)
- You should now be able to connect to Xbox Live via your internet sharing Mac
If you manage to get this method, or a similar method working, don't forget to drop by the comments thread to record your experience!