Linksys WRT54G wont connect to the internet for my PC and Xbox?

You need to but the second router (furthest from the modem) into router mode, instead of gateway. You need to give it a different ip adress (192.168.1.2 works) and most importantly, you need to pretend the WAN connection doesn't exist on that router. The Ethernet wire should go from the first modem LAN port to the LAN port on the second modem. Yes that's complete non-intuitive, but that's how it works. You want to extend your local network, not put in a NAT'd subnetwork so you need to use the second router in router mode as a switch or hub.