I did not read all of the responses here, so sorry if any of this has been said already. I really feel for you!! I have a set of twins who are 19 and they are now living with grandparents. It is a long story - I wont go into gory details, but the jist of it all is that my parents did not think either twin was capable of supporting themselves OR taking on any college loans. They are both in college. So my parents took them in when DH and I decided to move to a small apt (another long story involving my semi-voluntary unemployment due to new LO). My parents thought that their model of being generous and hard-working and responsible would rub off on my twins and they would miraculously turn into hard working responsible adults. Neither have worked a job since they moved in there (whereas both had jobs while living under my roof) and even though they were told they would HAVE to get jobs, neither has. But oh, they have plenty of money to go to movies, buy games, go out to eat, have internet, have car insurance paid for, take out girlfriends, drive across the country to visit long-distance girlfriends and stay in hotels, and take out loans to buy new cars. So yeah, I am staying clear out of that mess now.
I believe that 19-23 is about the most difficult time in a person's life - figuring out what to do with your life is SO HARD without some real hands on structure. You TELLING him or even putting it in WRITING or having him draw out a plan is not structure. This is what I would do in your situation. I would first figure out a way to deny him internet access to his own computer (remove jack or wireless card, etc). I would do it without telling him in advance - no fights yelling or negotiating. Then when you have his attention (which will be instantaneous) I would give him a certain time frame to when you expect him to take his next step. That next step might be his own apt, the military, college, or mission/volunteer travel (as another poster gave good examples). The time frame might be 6 months, 1 year, whatever you decide. Then say to him his rent needs to be paid in earned cash (not chores or gift money) before the internet access is granted. Do not give him any allowance. You should consider buying bus tickets for him instead of giving him cash so he can get to a job interview, etc. DO NOT WAVER!!!! You have to be absolutely of one mind with your husband and make sure you both have the discussion with him together. If there is ANY inkling that either of you will waver on this ultimatum, your son, like a black bear, will smell it and will know you are blowing hot air. I would also have DAILY updates whenever you see him and he is awake and alert. I would be ALL OVER HIM every second until he gets a job. BUT I would not drive him anywhere or give him anything, he is not 6 years old and he can and will find a way to do it if he is forced. If he does actually surprise you and pay his rent, I would keep it saved in an account for him (without his knowledge) so you can buy him stuff for his apt (or make a deposit, etc).
This kind of tough love really is not tough. Our forebears had extremely tough conditions in which to grow up and it made them strong. Do not worry about doing damage - he is an adult. If he still does not do anything, which if he really likes internet, he will - then I would plan to kick him physically out of the house. (well, not physically kick him - you know what I mean). If you two get tough with him, he will turn out fine. He is perfectly capable of doing it, you have to believe in him.