When I pess y I get the options:
allxboxskins.com
Xbox-Skins.net

Niether works. I'm connected to the net.

Is there a way I can troublshoot this or has that feature changed?

Edit:
It says
Unable to retrieve the file : HTTP STATUS 1100....

Could be a number of things tbh, but is your firewall set to gateway mode, or switched off. If not it needs to be, do your RSS feeds work on your skin or in XBMC can you get online?

If you are connected and not blocked via your firewall you should be able to download skins, newsfeeds and vids from unleashx, and also stream media in XBMC.

YOU COULD JUST ALSO TRY and go under system>settings>network
enables:YES
type:SHCP
try changin ur settings..then reboot..then try to do it again.good luck.pz

Please forgive my stupidity, but where is the skin browser that even has me pressing Y for downloading straight from the net? I see settings...file manager... I know that in settings you can tell it where the skin DIR is, but I'm guessing, after i've messed with it all of today, that this is not where you pick your skin. When I give it the DIR, it doesn't let my change the [default] option to anything. I checked the config.xml for a double <skin> tag, but only found one. I deleted that, just incase, and still nothing. I even replaced the default.xbe (even though my old one was below 500kb, and the new one is almost 3mb's?). I also made sure to update to the most recent version, I was able to do that straight off the net from my box. I keep reading about "pressing 'A' twice, as it says at the bottom of the screen," however, I've never found a menu with the skins that even says about pressing A twice.

So, how blind am I?

switch your ip to DHCP and it should work .. i had the same problem and it worked for me

i had the same problem till last night, all i did was set up internet connecton sharing, i searched for how to do it on MS help site.