With the release of iPhone 3.0 tethering just got easier and there is no longer a need to jailbreak your phone!  Just run a little command in terminal (Make sure you are on OS 3.0 on a 3G iPhone and iTunes 8.2):

defaults write com.apple.iTunes carrier-testing -bool TRUE

After that, the steps become a lot more simple.

  1. Download this file (for AT&T) and mount the disk image (thanks Gizmodo) for other carriers, try here.
  2. Option-click on “restore” in your iTunes with your iPhone attached.  Browse to the opened disk image file and hit OK. It will update phone settings for a few seconds.
  3. You have tethering.  Now go into your iPhone/settings/general/network/Internet Tethering and turn it on.

Boom – 3 steps to tethering…

Oh, and how to you like cut and paste and spotlight search?