I was looking to have a Halo: Reach party with 16 people (4 Xbox 360s) at my house, but in talking to a friend, I became worried when he said he was not able to connect through the (Existing) wireless network to play vs other XBox 360s. Can you run 4 xBoxes off the same wireless network and have them connect to (local) network games or can this only be done with a wired hub? If so, is there any special setup I need to do first?
Wireless works fine for Xbox System Link. Microsoft's help page for system link states:
A system link cable or crossover cable for each console, an Ethernet hub or switch with enough open ports to connect the consoles together, or a wireless networking adapter for every console.
The more recent version of the Xbox 360 has a wireless adapter built-in. It's safe to assume that if you can play on Xbox Live wirelessly at home, that it has the correct hardware to play in a wireless system link setup with other Xbox 360s.
If you have a wireless network already in place where you plan to play, you'll have to configure the wireless settings on the Xbox 360s to connect to the wireless network wherever you're getting together, but otherwise no additional setup should be required. You can also mix and match using the wireless adapters on some consoles and connecting via an ethernet cable on other consoles, so long as they're all connecting to the same router/network. For instance, you might put one Xbox near the wireless router and use an ethernet cable for that one, and then have 3 others spread out in the area connecting to the router via wireless.
The Xbox 360 also supports an "ad-hoc" wireless mode where you don't need a wireless router, but in this configuration you'll only be able to play with 4 Xbox 360s if they all have wireless adapters.