My Vigor 2710n router is broadcasting in 11g/n mode but my N61 wireless adapter is working at 54 Mbps. I don't know how to set it to 11n. Ive read elsewhere that for 11n, you must use WPA/WPA2-PSK with AES encryption. Is this true? Help please...

If it's showing 54Mbps, 90% of the time that's the security settings you're using - to make use of the full 802.11n speeds, you'll need to use either no security (bad plan) or WPA2/PSK security.
WPA/WEP are weak / bad for 802.11n speeds so they cap the speed down to 54mbps.

Configured to WPA2/PSK (AES) and it worked as suggested. Now 270 Mbps. Xbox 360 also at 11n now. Thx