How can i fix a good to bad connection on xbox live?

There are a few things that come to mind,

1: your friend is right are there any other wireless Devices near by such as a laptop, ipod touch or anything like that if so you should move them.

2: Your router is connected to way too many things my router was originally connected to 6 laptops 3 ps3's and a desktop, not fun it lagged like crazy, if this is somewhat true for you disconnect devices you don't need or want. This problem can also be solved by getting a more powerful router that's what i did it can now hold over 15 devices.

3: Last thing i can think of is your X-box is trying to connect to another router maybe a neighbors or if your in an apartment has Wifi it could be that, then it connects to that one with a weak connection that will only work if someone else is host because, it is just needed for minor connection to the host, the way to fix that is find a way to move your X-box closer to the Router so it definitely connects to that router, or use a Ethernet cable and directly connect your X-box. I am not 100% sure if you would maybe be able to find an extension cord for a ethernet cable that you could directly feed it into the room that your x-box is in, from the room with the router, for that you would have to ask geek squad or research how long ethernet cables can be or if there is extension cords my guess would be know because i don't think the connection would sustain itself with extension cords they usually stifle the connection.