Trying to add Xbox to network

I recently set up my desktop with my neigbor on a wireless network. There were some bumps but things seem to be running fine now. However, I'm trying to have my xbox share the internet connection and am having some trouble. The current set up is as follows...

Cable modem --wired--> wireless router

Desktop 1 --wired--> wireless router

Desktop 2 --wireless--> wireless router (wireless network)

Then the problem is I'm trying to have a wired connection for my xbox and don't know whether to direct connect to my computer or to use another router. I've tried both ways but have not had any luck. When setup on a lan with my desktop (desktop 2) it can grab an ip address but has trouble when trying to access the dns server. When I try to connect desktop 2 to the xbox there is occasional trouble with the wireless connection as well. PLEASE, Can anyone HEEELLLPPP???

 

Make sure you have the Internet Protocol properties set to find the DNS server address automatically.

 

It's set to that and I'm still having no luck