I am not sure if it had anything to do with windows 2000 but I have just upgraded to winxp, clean installed.
I again set up my tcp/ip for pc and ip address in xbox as previously advised by Tango87....
"Go into your xbox setting change the Ip settings to:
Static IP: Yes
IP: 192.168.0.157
Subnet:255.255.255.0
Default: 192.168.0.157
SAVE THE SETTINGS!!!
Go to your computers "network connections" -> Properties->TCP/IP Settings
Set them to:
IP:192.168.0.1
Subnet: 255.255.255.0
Default IP: 192.168.0.1
Now turn off your xbox, open Flash FXP, go to quick connect, type in 192.168.0.157 then xbox as the password, turn on your box, then hit connect... that should work for you. try it out."
This time it worked
Thanks to Tango87