Xbox Ip address conflicts with port forwarding?

The Xbox Live set up I have is non-traditional. It is connected via using my PC as a gateway, essentially using the computers Internet connection rather than the Xbox being directly connected to a modem. The PC has a wireless adapter hooked up to it to connect to the router downstairs. For some background info: I use a WNDR3300 router and a Vista OS on my PC (not so great I know). This problem is originally derived from an NAT issue, however I'm sure I know how to solve it, the real issue comes from the fact that I can't take the necessary step to fix it. In my router settings, I can't port forward anything that doesn't have a one in the third digit section of the ip. For example, a static ip is typically 198.162.1.x. My Xbox ip is 198.162.0.x. The zero is the issue, and the reason I can't port forward. I've tried manually adjusting the ip address on the LAN connection to the PC and the Xbox ip to match, but it instead eliminates the Internet connection entirely. Help would be appreciated!