Okay! I upgraded to the latest ICS on my Droid 4 courtesy of Verizon!  Yay, finally got some ICS love.   So first thing I do is re-root and then download wifi-tether and no joy!  So I have been playing with it all weekend trying to get it to work.  Finally tonight a new wifi-tether beta is was released and works with your instructions.  Even though I can set the SSID and turn on encryption, my PC says it is not encrypted.  At least I am up an running with some internet access again.  Thanks for your work, I wouldn't have gotten anything working without your post!  The version of Wifi-Tether I am using is wifi_tether_v3_2-beta1.apk.  Happy tethering again!
Droid 4 - ICS 4.0.4