What type of wireless network are you using? It is 802.11 B or G? What kind of wireless router do you have? What channel is it using? Usually, you can configure your wireless router to use a different "channel". The default is usually channel 6, which is in the middle of the spectrum.
If neighbours are using this same channel, it can cause interference which you wouldn't notice with web browsing and the like, but that would interfere with time sensitive connections like that of an Xbox Live connection.
Also, you should consider using WPA security. WEP key is a very weak form of wireless network protection (although often the default). It is very easy to break into a wireless network using WEP. It is much more difficult, nigh on impossible to break into one using WPA or WPA2, which most wireless hardware, including the Xbox360 wireless networking adapter supports.