Thankyou very much for your help, Ill answer each Question you asked in turn then :p
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Quick question: when you try & get the XBox to connect, you do not leave the PC plugged into the modem do you???? You can only use *one* device at a time, & you should only have *one* device plugged into the modem at a time [unless you have the NTL Broadband & console service - which, IMO, is a waste of money].
"Change the PC to use USB"? Why?!
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Both yes and no, first time I tried ICS (hence i changed to USB so I could use my ethernet card for the Xbox), failed (turned out my ethernet cable wasnt crossover, bad me) and then only with the ethernet in the cable modem to Xbox and with the PC off.
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Also: is the XBox modded? If you have a modded XBox, then that could well be the reason the XBox won't connect [wouldn't explain the PC not being able to use ethernet though]
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No, it be brand new and unmodded.
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It may also be worth leaving the modem turned off for a while, before trying to then use the PC/XBox via ethernet. [instead of simply powering it off & then on, before connecting the PC/XBox via ethernet]
A while could equal...30 secs...few minutes...maybe hours....maybe overnight. You shouldn't really need to leave it off for any significant length of time at all, AFAIK, as a nice simple power cycle should be fine - but it does seem that sometimes people need to leave the modem off for longer than normal.
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Ok shall do, Its just that when I switched to USB it took one ip release, one power cycle and renew the IP for the USB connection, but I guess its not always that easy
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Once you do finally get the PC connecting via ethernet, then using the XBox will be easy. You can either: power cycle the modem when changing from PC to XBox -or- clone the PC's network card's MAC address onto the XBox [removes the need to power cycle]
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ah, good :-)
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Good luck  
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Thankyou very much, I hope I can get it working soon, cant wait to take my Evil to the Xbox live scene :-)