Here's the steps:
- Grab a copy of QuickPWN
- Run it and follow the on-screen instructions
- (When iTunes pops up, or says things, just ignore it but leave it running)
- Run Cydia and let it update itself
- Under commercial applications is PdaNet, install it (you get a demo period)
- On your laptop, create a WiFi network
- On the iPhone, go to settings, Wi-Fi and join the network you created
- Run PDANet, let it sit for a few seconds to figure things out
- On the laptop, use the internet, it works!
- Leaving PDANet running, press the power button on the iPhone to save power, it keeps running
- When you've finished using it, go to PDANet and turn off Wi-Fi router and exit
This is all much smoother than I read it used to be, starting proxies from a command line etc.
While it's running you get a status display.
On the tethered computer it feels pretty snappy. I used OsSpeedTest, and measured the download of a 3MB image at 169 KB/s which is what they suggest I should get on an ADSL 1 connection.
As I said, it feels snappy, which is often a result of good DNS and low latency as much as raw speed.
PDANet for iPhone has a 14 day trial of "full mode" which proxies all traffic, after that the free version just does HTTP. The full version costs $29.
My iPhone has been acting a little strangely. Three times it has kind of crashed as an email notification comes in. In one case it dropped a call and I couldn't call back until I'd rebooted it which took more than just turning it off.
So I can't say if it's the jailbreaking or if version 2.2 is less stable than 2.1. I've done a restore back to 2.2 native from Apple and we'll see how that goes.