When you connect your Xbox 360 console to your computer as an extender, the console tries to connect to the computer instead of providing an eight-digit setup key.
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This problem may occur if the connection data that is stored on your Xbox 360 console is preventing the console from generating and providing a new eight-digit key. It may also occur if a previous setup was not completed successfully.
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When you connect your Xbox 360 console as an extender, you must provide an eight-digit setup key. Sometimes, if your Xbox 360 console was previously connected to a computer, the console may not provide the eight-digit key. When your Xbox 360 console is connected to a computer, your console stores connection data and software that enables the connection. If your Xbox 360 console still has the connection data for the computer, your console will try to connect to that computer. This connection data will prevent your Xbox 360 console from generating a new eight-digit key.
You can typically resolve this problem by removing the connection data from your Xbox 360 console. Sometimes, you may also have to remove the connection data from the Media Center-based computer.
To remove the connection data from a Media Center computer, please see the following Microsoft Knowledge base article:
932208 (http://support.microsoft.com/kb/932208/ ) You are unable to connect your Xbox 360 console as a Media Center Extender to multiple computers
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