I've been using iPhone tethering since it became available in iPhone OS 3.0, and it's saved my geek bacon many times. On a recent monthlong vacation where my wife, my mother-in-law, and I hopped all over both the North and South Islands of New Zealand, using my iPhone's data connection on my MacBook Pro was often the only feasible way of connecting to the world beyond our campsite.
Many of the places we stayed had Wi-Fi available, but the prices were pretty astonishing; some places wanted $10 for 20 minutes of internet access. In towns where we had a decent 3G connection, we were able to watch videos in Safari (No Flash? No problem), look up tourist information, get access to Google Maps, download music and apps from the iTunes Store, and keep an eye on the notoriously fickle weather. All these things are possible to an extent using the iPhone by itself, but things went much faster and more smoothly on my MacBook Pro, where multitasking, multiple downloads, and a 17" screen are all big improvements over the browsing experience on the iPhone.
Read on to find out what else iPhone tethering can do for you, and why AT&T's excuses for not letting you have it are totally disingenuous.