Instructions
Unplug your wireless adapter and immediately plug it back in. The wireless adapter plugs into one of the USB ports on your Xbox 360. If the USB port has been temporarily disabled, or the connection has not been made properly, the wireless adapter won't power on. Unplugging it and plugging it back in should cause the indicator light on the adapter to illuminate, indicating the device is on.
Insert your wireless adapter into one of the USB ports on the front side of your Xbox 360. The wireless adapter manual recommends that you use one of the USB ports on the rear of the console, because it stays plugged in at all times. However, if the rear USB ports aren't working, you can try one of the front ones to see if that corrects the problem and powers on the adapter.
Reboot your Xbox 360 console: simply turn it off, and then turn it back on. As with a computer, this clears the Xbox 360's internal memory. If an error was preventing your console from recognizing your wireless adapter, a reboot will clear it and allow the Xbox to recognize the wireless adapter when it starts back up again.