I've upgraded to 3.1 and tethering still works on my iPhone. Wished the service was with Verizon. Maybe one day. Fact of the matter is there will ALWAYS be something about your carrier you don't like. AT&T has spotty coverage. Verizon has better. Verizon gimps their phones in a number of ways. I used to be able to tether through my Verizon Blackberry, but last time I tried that I got a web page saying I needed to buy another data plan. They all suck in different ways, it's ust a matter of finding the one that bothers you the least.

I spent the last couple of minutes trying to come up with a concise way to put it, but you beat me to the punch.