I had the same problem but I finally got a solution. I am replying here because this seems to be the only place on the net that is still talking about this. Unfortunately this solution only works for the PC and not the Xbox 360
I have a PC that is hooked up to my TV in another room via a really long HDMI cable and others. The problem was that the wireless controller would cut out depending on where I was in the room. I tried first to go the route of the RJ45 to USB converter. Please save your money and don't do this! The wireless receiver for windows needs to be plugged into a USB port with less than 5m of USB or RJ45 cable, this is due to the limitations of USB power over (long) distances. The wireless receiver will power on but it will not link to the controller. Add to this the pain in the ass of the wireless drivers that come with this thing and you have yourself a fun weekend.
Anyway, I bought a powered USB hub that is connected via a really long USB cable. I again plugged in the wireless receiver and still nothing. I reinstalled the drivers and finally this thing could control my PC from the front room. Now the thing about the drivers is that there is a specific, long-winded way of installing it... and you must do this every time you switch the wireless receiver to a new USB port. I can't find where I originally found this from but kudos to the guy who figured it out. Do these steps exactly as they are written and it will work.
Uninstall any drivers you've tried to install already - go to device manager and uninstall the driver for the "unknown device" (which is just uninstalling the device really, seeing there is no driver) and also uninstall any driver software through control panel. LEAVE THE DEVICE PLUGGED IN.
- Restart PC.
- Download and install the latest driver from the Microsoft Site.
- Restart PC.
- Go to device manager - you'll notice it still shows up as an unknown device. Right click on it and go Update Driver.
- Click "Browse my vomputer for software".
- Click "Let me pick from a list of drivers on my computer".
The list will take a while to load. Select Microsoft, then on the right, select Xbox Wireless Receiver for Windows (there might be multiple versions, go with what looks like the most recent one - mine was 126.96.36.1999) and click next. It will warn you about possible incompatibility, install it anyway.
It will ask you to restart. Do it.
Once restarted, go to device manager and you should notice a new slot - "Microsoft Common Controller for Windows Class", and under it, "Xbox 360 Wireless Receiver for Windows". Yay!
Now try pairing your controller with the receiver. Click the button on the receiver, then hold the big xbox button on the controller until it turns on and press the very small "connect" button on the forward side of the controller (the side with the triggers), while the receiver light is still flashing. Your controller light should spin for a fraction of a second and then Sync up and the first quadrant should stay lit. Yay! (if not, some people have had success by unplugging their USB devices and restarting and plugging in just the receiver first, then it syncs, then try their other USB devices again).
Anyway, that's how to extend the wireless range via USB cable & powered hub on the PC. Good luck.