After looking on the microsoft site I found:
A flashing green light
Black adapter with two antennae (wireless N adapter): The adapter is attempting to connect to a wireless network.
This would suggest to me that you have either entered the wrong security key or there is not enough signal. Have you tried deleting your config and setting up again and how many bars of signal do you get when you enter the network settings menu
Also, try following this wizard: Can't Connect to Xbox LIVE Solution - Xbox.com
come back here if any questions arise regarding that.