For those still confused about the issue of tethering, here's the deal as I understand it. VZW has a "broadband access" plan that runs about $60 per month and includes up to 5 gigabytes of data transfers over their 3G network. They used to call this an "unlimited" plan. But I believe they've changed the name since it is limited to 5 gigabytes per month.
To use it, you need one of the following: a usb "modem" for your PC/Mac with the VZW software built in, an "express card" that serves the same purpose, or a PC like an HP Mini311 with the software already built-in. (I used to have an express card and now have an HP Mini311 netbook.) All three hardware options are sold or given away "free" by Verizon in a manner analogous to buying a phone. You get a specific number for the card/modem/netbook and a one or two year contract.
I've had the broadband access plan for several years because (a) my previous VZW phone did not support tethering reliably and (b) I must have internet access when I'm traveling even if I cannot get a WiFi signal for my laptop.
In reality, I never ever exceeded the 5 gigabyte limit (or even came close) because most of the time I accessed the internet on my laptop using WiFi either on my home network or at a client site. But once in awhile I had to use the VZW network because I could not get a reliable WiFi signal at a hotel or client site.
VZW imposes the 5 gig limit on their broadband access plan because with a PC/Mac one could conceivably use more than 5 gigs (much more) by frequent streaming of internet content from sites like Bit Torrent.
OK. Now comes the Droid with a truly "unlimited" data plan. VZW figures they don't have to worry much about heavy use of their 3G network with a phone because they assume (perhaps incorrectly) that people won't use their phones as if they are computers. And therefore exceeding 5 gigabytes a month on a phone is very unlikely unless the phone is "tethered" to a PC/Mac.
But just to be sure, VZW "prohibits" a Droid from being used as a broadband modem (i.e. "tethering.") Thus, they can advertise an "unlimited" broadband access plan for the phone and theoretically prohibit its use as an "internet gateway" for a PC.
Note that on less capable phones like the Palm PrePlus and PixiPlus, there is no "tethering" restriction simply because VZW figures that they are less likely to be used as modems (again, perhaps incorrectly) and the burden on the 3G network from such devices is likely to be minimal. So VZW can use the "tethering" capability as a sales tool on such phones without much concern.
As to whether VZW can "tell" if you're using your phone for "tethering," as others have noted, they can't. What they can do is monitor your amount of data traffic. And if you're downloading/uploading several gigabytes per month, they can assume that you're probably using your phone like an express card and avoiding paying for the $60 per month broadband access plan. Thus, they've floated the notion that they may charge you an additional $30 per month (on top of your $30 per month "unlimited access" smartphone data plan) to bring you in line with what you'd pay for their "broadband access plan. Whether they've actually done that, I have no idea. They also reserve the right to cancel your plan altogether (or charge you a premium price if you exceed the five gigabyte threshold.)
I strongly suspect that VZW doesn't want to test its contractual ability to charge you more or cancel your contract for excessive data transfers on your "unlimited" phone plan in court simply because they cannot prove you're using your phone as a broadband modem. They can only track the amount of data use and (perhaps) the sites you visit. (And if they can do the latter, they probably don't want to publicize it through a court case.)
The bottom line is that I doubt very seriously that VZW will try to enforce the "no tethering" clause in their contracts for Droids (or other similar phones) unless they encounter truly extreme examples of heavy data transfer use. They may well try to frighten some users by "warning" them about such use, but I'm confident their lawyers have warned them about potential lawsuits and the problems of charging a customer extra or canceling an "unlimited" data transfer contract in such cases. At best, they're on shaky legal grounds or facing a potential PR disaster if they try to prove a customer is using a phone as a modem by citing the sites a user downloads from.
Personally, I have no reason to tether my phone (though I've tested PdaNet on my Droid) since I have a netbook with VZW broadband access. But one of my colleagues has been using his phone for tethering for a couple of years (where the phone is similarly prohibited from tethering) and has encountered no problems from VZW. Since he, like me, usually connects to the internet through WiFi on his laptop, he doesn't come close to raising eyebrows about his phone's data use. For all the reasons cited above, I don't think he has anything to worry about.
