Yup, you sure can.
Go to System Preferences/Sharing/Internet tab.
From there, you decide how you want to share your internet. In your case, you want to share the connection over Ethernet. Since, your laptop is connected through wireless.
I believe you have to also turn on Personal Web Sharing in the "Services" tab if you want the other machines to be able to surf the web.. unsure if that will affect you being able to update the XBox 360 or not.
Mac OS X 10.4 Help: Sharing your Internet connection