This is a repost of what I wrote down on someones elses thread. Better to share the knowledge with everyone now instead of reposting every time the question is asked. Cheers and happy tethering.
Step 1. Go to this link via your phone and download this version of Wireless Tether,
wifi_tether_v3_1-pre101.apk - android-wifi-tether - WiFi Tether for Root Users 3.1-pre101 *** EXPERIMENTAL *** - Wireless Tether for Root Users - Google Project Hosting
Step 2. install it, duh!
Step 3. Go into settings and follow this down to the letter,
Change Device Profile-Motorola Targa
Change Setup-Method-Dont touch
Enable Wifi-Encryption-This is a must because with out it, no device will not see your SSID, have to manual enter them ie. laptop to connect.
Change Passphrase-Has to be at least 13 letters/numbers. By default it was setup with abcdefghijklk. Either keep it like that or change it.
Change SSID-Change to what ever you want it to be
Change Channel-I had a couple of my friends try different setting and seems to work but for best results use "Channel 06(2437)"
DO NOT ENABLE ACCESS-CONTROL- very buggy, sometimes you'll see your SSID but nO password attached, meaning its an open wifi even though its not.
Everything else leave them alone, if you want, unless you like the vibrate feature....
Now from here back out from from Wireless Tether and go back, Someone said that you might need to force close the app via app manager. I didnt have to but try and see if that helps. From there you should see the app start with your data usage at the bottom. Next go to anything that can get WIFI. I used my laptop, my Transformer, and my Xbox. Works fine with no problem. The only thing i have problems is that the Razr 4G drains battery like crazy.
Some ppl have said that on 3.1 beta6, all you need to to is enable encryption and you should be find... couldnt get it to work.... not on mine, not on my friends, not even the store display...lol