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Subnet should be 255.255.255.0.
Gateway should be the IP address of the PowerBook.
I have no idea how the Internet Sharing works or how it hands out IP addresses under Mac OS X, so I can't tell you what IP address your XBox should be set to.
Have you tried setting up the XBox to configure this automatically? I know you can tell the XBox to "Detect settings" somehow -- have you tried this?
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