After trying the wireless network adaptor at a friends house, where the result was the same as what I as getting - it reporting disconnected, I've came to the conclusion there was a bad batch that GAME bought or someone is broadcasting a forcefield that nullifies all wireless network adaptors in the given area. I think its the first one. Regardless, I'm getting a refund and trying a wireless to ethernet bridge to connect, it seems cheaper that way anyhow.
I've been having the exact same problem, i bought a brand new wireless network adaptor, and it is lit up as a steady red. It also reports the the adaptor is disconnected. There isn't an ethernet cable plugged in. The wireless settings are also grayed out. Support very helpfully has told me the situation is 'impossible'. It has been tried on 2 360s in the same house. Worked on neither. Took it back, and the new one is also reporting to be disconnected on both 360s. I'm going to try the wireless adaptor on a friends 360 later to triangulate the problem. From my internet research, there have been no answers that have worked for me either. So, you ain't alone.
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