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I had this problem, I Just entered all of the details required, when i got disconnected from xbox live, my freind helping me, who i got up at 9 in the morning to help me set it up, was 'bout to leave when he said, one more idea
And he took out the ethernet port out of ethernet port 2 in my "BT home hub"
and put it in 1, or it was the other way round.
And it worked!
Try that, sorry I couldn't be more help.
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