I hate wires. So, I was happy to remove the ethernet cable from my Raspbmc setup and replace it with a USB wireless adapter. The steps are pretty easy:
Get a USB wireless adapter. These are very cheap. I bought a DX Original USB wireless adapter, since I had read that it works out of the box with Raspbmc. Plug in the wifi adapter to your Raspbmc.
Connect a wired or wireless mouse or remote to the Raspbmc. Use it for the configuration steps.
Reboot the Raspbmc. This is needed sometimes for the mouse to be detected.
Go to Programs > Raspbmc settings. In the Network Configuration tab change the Network Mode to Wireless.
Configure the rest of the settings. The default is DHCP. If you want to use a static IP address, provide the necessary details.
The scan for wireless networks did not work, it showed up empty. So, I manually entered the Wifi SSID (name of your wireless network), Wifi Security mode and the Wifi Key (wireless password). Click Update Now and OK.
Your wireless adapter should be able to connect to your home network now. If not, reboot the Raspbmc.
Unplug the Ethernet cable and enjoy your Raspbmc 😊