Uhm, that all sounds fun and... complicated. But I simply downloaded one of the basic wi-fi tether apps and made sure the encryption was enabled. Worked like a charm.
I had a difficult time finding an app that would work for my phone as well, but then I happened upon somebody mentioning the encryption thing, and ever since, it's not been a problem. The one in specific that I use is WiFi Tethering by OpenGarden, Inc.
I hope this helps.