Most likely you have some draft-N router, which doesn't implement the official 802.11n standard. Some routers can fix this with a simple firmware upgrade, but most are just designed to be shoved out the door, be on the market for 6-12 months, and then EOLd.
So, save yourself some money and just buy a patch cable to connect the Xbox to the router. Wireless is horrible for gaming. Just having a faster connection won't do anything to improve lag times, but a wired connection over wireless might.
I have an Xbox slim w/ built in N broadband and my wireless router is an N but the Xbox isnt recognizing it as N just as G. Sorry if my terminology is off. Any suggestions? thanks