I connect my 360 to Xbox Live by connecting it to my PC (via ethernet cable), which gets an internet connection from a wireless router. I bridge the connections and give both the 360 and PC a static IP address. I have also helped one friend connect to Live in the exact same manner with no problems.
 
A third friend has a problem I can't figure out, though. When his 360 attempts to connect to his router with a static IP address, it fails - even if it has a wired connection to the router. The PC can access internet with a static IP address, but as soon as I enable Internet Connection Sharing or Network Bridge, the connection immediately stops working and the PC can no longer access internet. I do make sure that the static IP does not conflict with the router's DHCP range, so it's not that.
 
Is this problem related to the ISP and therefore cannot be solved without contacting them? Are there some settings that I am missing?
 
Router is a D-Link DIR-628; notebook is an old Compaq connecting with a Linksys wpc54g.
 
Thanks in advance for any help/advice.

That sounds more like an ICS issue on the PC. Just for sake of completeness, have you tried connecting the Xbox directly to the modem, just to be sure it can get out? It's all about process of elimination. Keep eliminating possibilities and the answer will eventually present itself.

Have you tried reserving the ip address at the router instead of the pc? When I had my xbox wired to my pc I had everything set to auto. I believe the xbox ended up duplicating the address of the pc. You could also try giving both the same ip.

Turns out it was the old wireless card giving us problems. Tried my PC's wireless adapter in his, and it worked without any adjustments necessary.
 
Thanks for the help all.