Difficulty level:
Medium

What you need:
>Mac OS X 10.5 or later
>Download this carrier settings file from gizmodo.com and double click it to mount it in Finder
>iPhone OS 3.0
>Final release version of iTunes 8.2 (download link)

Notes:
iPhone OS 3.0 will be available to all iPhone users on June 17.

Apple iPhone Tethering

Setting up tethering for your iPhone

Uninstall iTunes 8.2 Mac

1. Drag the Application iTunes from the apps folder on your Mac to the Trash.

2. Launch Activity Monitor from Applications/Utilities and kill the iTunes Helper process.

3. Go to Finder. Navigate to your ~/Library folder and delete the iTunes folder at ~/Library/iTunes.

4. Navigate to ~/Library/Preferences, locate the following three files, and drag each one to the Trash: com.apple.iTunes.eq.plist, com.apple.iTunes.plist, and com.apple.iTunesHelper.plist

5. Empty the Trash

Install iTunes 8.2 prerelease Mac

6. Install the iTunes 8.2 prerelease you downloaded.

7. Connect your iPhone with iPhone OS 3.0 software loaded on it to your computer with the standard USB sync cable.

8. Once the iPhone is connected, go to the Device Summary page in iTunes.

9. While pressing and holding the Option key on your Mac, click the Restore button in iTunes

10. Browse to the mounted carrier settings file you downloaded and mounted above and select the ATT_US.ipccfile. iTunes will now perform an upgrade on your iPhone and display the following message:

Set up tethering on your iPhone

11. Launch the Settings app on your iPhone and go to General and then Network while your iPhone is still tethered to your computer.

12. Locate “Internet Tethering” and turn it on.

If tethering is successful, you will see a message that is similar to the following:

Go into Preferences Network select the adapter as displayed above, and you’ll see something similar to this as it becomes active:

Your iPhone will display a blue background banner on different screens to indicate that tethering is active and running as shown below.

And you’re done!

Please comment with your success, tips, tricks and issues!

3g Tethering Supported by Apple

11:01AM Tethering! “This allows you to share you connection with your computer.”

11:02AM “This works with Macs and PCs, wired over USB, or wireless with Bluetooth. It is a seamless experience. There’s no need to run any software once it’s turned on. This requires carrier support. We have 22 partners in 44 countries…” No mention of AT&T. What!?

It’s still not clear exactly what happened to NetShare; the makers of the program told posters on the MacRumors forum that they haven’t heard a peep from Apple.

But it seems obvious that Cupertino pulled the app off iTunes shortly after it went live—and probably at the behest of AT&T.

AT&T doesn’t allow iPhone users to tether their laptops to the phone’s data connection, although several overseas carriers offer “phone as modem” plans for the iPhone 3G. Indeed, laptop tethering is a common feature for most 3G smartphones.

I didn’t get a chance to test NetShare before Apple pulled it from the App Store, but according to MacRumors, the program lets you connect your laptop to the iPhone via the handset’s Wi-Fi connection. The process involves configuring your iPhone’s IP address, enabling the SOCKS5 proxy option on your Mac or PC, and then entering your iPhone’s IP into the proxy server field. (Click here for screenshots.)

NetShare works on either the iPhone 3G or the original iPhone with EDGE, and users reported that the program works just fine, MacRumors said.

A post on the MacRumors forum that bills itself as an “official reply from Nullriver reads, in part:

We’re not quite sure why Apple took down the application yet, we’ve received no communication from Apple thus far. NetShare did not violate any of the Developer or App Store agreements. We’re hoping we’ll get some feedback from Apple tomorrow. Sorry to all the folks that couldn’t get it in time. We’ll do our best to try to get the application back onto the App Store if at all possible.

Well, Nullriver may not have violated any developer or App Store agreements, but check out this clause in AT&T’s terms of service:

[P]lans (unless specifically designated for tethering usage) cannot be used for any applications that tether the device (through use of, including without limitation, connection kits, other phone/PDA-to computer accessories, Bluetooth® or any other wireless technology) to Personal Computers (including without limitation, laptops), or other equipment for any purpose.

That’s pretty much the ball game, unfortunately. Still, you’ve got to wonder—why won’t AT&T offer an official tethering plan for the iPhone 3G?

Update: MacRumors reports that NetShare is back on the App Store, but only via direct link. Also, be aware that you run the risk of violating AT&T’s TOS by using NetShare, not to mention running afoul of any data usage caps.