Well, I got my answer from the Buffalo tech support and they just said that there is nothing wrong with it and said: "If there is encryption on the router, turning it off, making sure that aoss is turned off and then trying to connect. Most times its an encryption level that is not allowing connection, and nothing else."
My AOSS is off and I have tried it with no security, WEP, WPA and WPA2 and with both TKIP and AES. Am I missing something here?
The Xbox can find the router, it just can't get an IP address or connect to it.