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Jailbreak the iphone
http://cydia.xsellize.com/ to cydia
Install "MyWi" in the Xapps group
1. Turn on
2. Make network
3. Open/WEP encrypted wifi network which shares your internet. It's perfect. Not only can you tether to one device you can tether to anyone around you with the key (or keep the network open) great for roadtrips if someone has an ipod touch or a netbook.