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Never use USB from your modem if you can get away with it. It makes home networking harder than it should be.
Can you tell me the model of your modem/ router and how your PC and 360 are connected to it?
You've pretty much answered my question regarding IP addresses when you said that you just plug it in and it works. It means your modem is handing out the IP addresses automatically, and that's all you need to worry about.
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