After switching from WEP to WPA2, of course I had to update several XP and Vista machines. However, the 360 made most trouble since I used a D-Link 700AP before which was configured as a wireless bridge. Since I run a Linksys WRT54GS as gateway, it seemed to be the easiest way to get a second device of the same kind to be set up as wireless bridge being flashed with an alternative firmware. However, I realized that there is a endless number of devices in this series. After getting the device, I had to figure out, the new device is version 7. Due to an change in the manufacturer firmware, the ROM size of the device was continuously reduced. At this time I thought about the fact, getting a WRT54G (which is the old hardware factor and Linux based) might have been the better choice. Now I simply replaced the existing device with version 4 with the new one. and the old one providing 4 MB of RAM became the wireless gateway.
There are a couple of alternative firmware projects for the WRT54GS. After reading though a couple of posts in various forums, it seemed that OpenWrt is the best choice. In addition, X-Wrt seemed to be suitable for easy setup. During the setup of OpenWrt, I encountered several problems ending up in my router being bricked. So I had to recover the device using TFTP and the original firmware.
After several failures and digging a bit more I found more and much better documentation on DD-WRT including documentation for setting up wireless bridges. While v23 does only support WPA2-mixed mode, I switched over to v24 RC4 which finally supports WAP2 Personal.