Well, I've been in the same situation. I was planning on selling my 360 and sold off my 360 wifi adapter first. Then I decided to keep the 360, but I didn't feel like springing for another $99 360 adapter or buying a used one of eBay.
I bought a second Linksys WRT54GL, installed Tomato firmware, and configured WDS on both routers. Only one of them acts as an access point, router, and gateway. The one the 360 is attached to is just a bridge.
I could have used standard wireless bridging too if you want. Whether you choose wireless bridging or WDS, the router you buy has to support it or third party firmware that does has to be available for that model. I believe they both have pros and cons so you'll want to look into that if you choose this method. I know one of WDS' cons is that on the bridged side you get half the normal 54G throughput. In my case with the 360, this doesn't matter because it doesn't access anything on my LAN and only uses the Internet, which is much slower than half of 54G anyway so the WDS bridge itself isn't a bottleneck for me.
A note about WDS: From what I understand, it does not support WPA2, only WPA. I haven't looked deeply into it; it could simply be a limitation of the Tomato firmware I use. In any case, I believe that WPA+AES is highly secure as long as you use a long passphrase.
All this said, the best solution is always wired. I haven't had any problems at all with this configuration, but if I had the time, skill, money, and patience I would run some CAT5e around.