How To Tether Android Cell Phone
You may not know yet that your Android cell phone is a powerful device which can be utilized as WiFi hotspot or mobile modem. This capability is known as tethering. With this tethering capability, Android cell phone is very suitable for mobile broadband (3G, 3.5G, or 4G) for sure. Mobile broadband offers the fast and reliable internet connection while mobile and Android cell phone offers tethering capability to share the connection to other devices.
There are many tethering methods available for Android cell phone such as USB cable, WiFi, and Bluetooth method. In my opinion, the wireless tethering method (WiFi and Bluetooth) is the best option since no needed complexity of cable usage. For Android 2.1 and below, the tethering requires to root the cell phone first. There are many Android rooting apps available which can be found in the official Android Market as well as in the Unofficial Android Market.
One option available is PDAnet Free which supports for Bluetooth tethering method. This application is available in Android Market. By using PDAnet Free, it no needs to install the tethering client in PC/Laptop if use the Bluetooth tethering method. However, if use the cable USB tethering method, the tethering client is a must. Another option is Proxoid which is also available in Android Market.
Proxoid allows to tethering a Android cell phone without rooted. However, the tethering method available is only the USB cable tethering method which is not so comfortable for mobile usage. It is quite easy to use Proxoid – download from Android Market, Install it in Android cell phone, Activate cell phone USB debug mode, activate the Proxoid, and connect the USB cable to PC/Laptop. Proxoid supports various computer OS such as Windows, Linux, and Mac OS.
For Android 2.2 and above, the tethering features is built in so no need to root the cell phone as well as to install the third-party application for tethering. Users only need to activate the default tethering function and the Android cell phone become an internet sharing device. This build-in tethering feature supports both of data cable and WiFi tethering method. For cable method, access [Settings]>[Wireless and network] and then tap [Tethering & portable hotspot]>[USB Tethering].
Of course, after the USB tethering is activated, the USB cable should be connected to PC/Laptop. Users still need to configure (add) new connection in the PC/Laptop to make the tethering connection fully established. It is more simple for WiFi tethering method. Access [Settings]>[Wireless and network] and then tap [Tethering & portable hotspot]>[Portable hotspot]. Then, insert the 8 digit password which will be used by WiFi enable device to connect. Click [OK], the Android cell phone has became a WiFi hotspot.

I guess I may be naive on this topic, but thanks to this post I now know what it means when they say “tethering” on android cellphones.