Xbox 360 live lagged and disconnect often with Linksys WRT300N router

I live in a two story townhouse with the modem and wireless router (Linksys WRT300N) located in the upper floor and the Xbox 360 system with wireless adapter in the bottom floor.  Our laptop works fine with good connection but the Xbox live gameplay lagged big time and disconnect often.  What are we doing wrong?

Configure the X-BOX using static IP....subnet mask ....gateway & DNS numbers as in the range of router ....
Also use the wireless settings same as in router
Forward the ports 88 & 3074 .... .on router .....
See above settings make any difference

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