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You are going to end up with a very complex arrangement if you hope to use Internet Connection Sharing (or some sort of concoction of that) for a wired connection between your laptop and Xbox360, with wireless to your Tiscali modem. It also defeats the object of a laptop's portability if you need to wire it into the network.
Wireless can be great, but some people do find it's not as robust as wired connections. With something like xbox live that has a potential to be an issue. Wireless signals can be affected by walls / floors and other stuff that they have to get through, interference from other electrical appliances, and such like. Add the extra "hops" of your network traffic via the shared connection laptop, and you are getting into iffy territory.
You can get a wireless network adaptor for your xBox, allowing it to communicate direct with a wireless router. It might not be especially cheap, but it does remove the laptop dependence.
Router's for ADSL services such as Tiscali, can have an integral ADSL modem, so you wouldn't need the Tiscali supplied thing (if your modem is USB only you need to replace the modem), or alternatively you can have a separate DSL router ethernet connected to the ADSL modem. Stick to the major brands such as Linksys, Netgear, D-Link since all are well used and thus there are plenty of people who can offer support.
Only use at least the "g" speed wireless (your laptop's inbuilt wireless would run at that speed), or perhaps the faster "pre-n" speeds (your router would auto sense the slower laptop speed).
Another alternative is a network over your power socket wiring. There has been a lot of success with that recently.
Finally, where are your phone extensions located. With ADSL you can easily relocate the modem (and router), perhaps to a much closer extension. You just have to move around the little ADSL filter things.