Ditto. I've set up a few Linksys routers and they are quite easy to do. Then I'd suggest their wireless bridge for the XBox (I assume it will work with that one), and any number of options for the computer (I have a USB wireless network adapter).

All those links are for an 802.11b network, as that's all I'm familiar with, but you can decide what you want to go for. The good part is that prices for these things have dropped significantly since I first saw them. My father's router cost him about $120, and I just bought the same one this summer on sale at Best Buy for about $65.