"Note: Some copies of the instruction manual for the Xbox 360 Wireless Networking Adapter state that the adapter is compatible with the WPA2 security standard. At this time the adapter works only with WPA and WEP security."
Microsoft's website explains why WPA2 is dimmed out as an option while configuring the 360's network settings. Leave it to Redmond to sell a $100 USB Wi-Fi adapter that supports WPA2 in documentation only.

