Your Sky Set top box (STB) generally has a fair few connections coming out of the back.
The green Ethernet one is the one we're interested in for on demand content coming in via broadband. First of all make sure the telephone connector / cable hasn't been shoved in this socket by accident. (I've seen this done before!) If so put it in the right socket which is the orange telephone line one. To my understanding that's important also for pin services like renting a movie on box office.
If you have nothing in the green Ethernet port then we are going to need something in there connecting back to the router to get our broadband across to the unit.
There are a number of ways to do this:
The best in my opinion is to run a Ethernet (CAT5e or CAT6) to between the two units. This can be upto about 95m-100m !!!
Another way is to get a wireless adapter for the STB and link the units wirelessly. These can be bought direct from Sky:
I only recommend these where there isn't too much in the way off the router and the STB. A good test it to use a wireless device like a laptop / iPad where the STB is and run something like BBC iPlayer to test. If the distance is too far or there are too many think walls / too much noise from other wireless devices, then this may not be the best option for you.
For further info regarding the wireless connector: PDF
The last option is to use your electricity sockets in the home as a network to get a cabled link back to the router. For this you will need adapters in power sockets by the Sky router an STB. These can be had for around £30 and I have linked to some in the Amazon widget at the bottom of this page. See this wiki-page for a better description of the technology.
On a completely unrelated note. If you want 5.1 Surround sound from your STB remember use a optical sound cable as Sky still don't send the surround sound down the HDMI which is disappointing!
Update: You can now get STB's with built in wifi and also as mentioned in the comments, Surround sound now can go via the HDMI. http://www.sky.com/shop/tv/sky-plus-hd-box/
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