as to your original question, I think it should be possible.
But I would not want you to lose internet connection,
or for that matter do any damage to your system.
As to possibly why you lost connection for an hour.
do you have any security setup with Sky? (regular WEP security etc)
if you did and have restarted you would need to enter your regular
wep encryption. (password with random numbers and letters)
Sorry mate I dont want to confuse you, I just know the problems I have
with a wireless network at home, but basically they all need to be able to see
each other over the wireless network either with security on or not.
Like I said I dont have either Xbox or Sky,