Hello, my name is Rusty. Please double check these things:
That you plug into the side USB port on your Xbox.
That the wheel is plugged into the pedals.
That you plugged into power.
With these things true, reboot your Xbox, and tell me the results.
When you plug it into USB, does the wheel move?
It should rotate fully in each direction, then center to calibrate it. Is it doing that?
Hmm, the wheel is fine, it's just not communicating. Turn everything off and unplug them for 30 seconds, including your Xbox and the USB connection for your wheel. Connect the USB, then plug everything in, and turn them on. Does that establish a connection? Push the Xbox button on the bottom of the front of the wheel.
Ok, let's make sure the firmware is up to date, click here. You'll have to plug it into your computer to do the update. I know it says it's for PC mode only, but it will load the software, which seems to be the issue.
Another thing, do you have any other controllers connected?
Ok, there seems to be a conflict in your Xbox. Let's clear the cache.
Press and hold the power button on the front of the console until it powers down completely. Unplug the power cable from the back of the console so that the power brick in not connected to the console. Press the power button on the console three or four times.
That will clear it, and will give the CPU a fresh start. Now try the controller.
Is Xbox finding it now?
Hmm, would you say that is an improvement before clearing the cache? I'm trying to get clues as to where the problem is. It is looking like a bad controller.
Yes, but sometimes they come out of the box with a manufacturer's defect. One more attempt to clear the cache. Press and hold the power button to get it to shut off completely. Disconnect the power cord from the back of the Xbox. Hold the power button for 30 seconds to completely drain all of the residual power.
Now when you plug it in, if it doesn't like to calibrate, then you have a faulty controller. Best Buy will exchange it for a new one for free.
Let me know if the new one doesn't fix the problem.