Yeah, the tether apps do seem to work. For what it's worth, I own a Galaxy 10.1 (which you may want to look at if you're considering the Xoom), and I had kinda went through the same thought process.
When I bought it, the 4G version wasn't out yet...and wasn't gonna be out for a few weeks. Not too concerned about storage, so I planned on getting a 16GB version. I figured the Wifi only version was $30 cheaper (retail) and wouldn't require dedicated monthly data charge and contract, plus as long as I have my Thunderbolt, I can always just tether my tab to it. Seemed like an easy decision.
For the record, I have the legit $30/month mobile hotspot plan added to my phone at this time. Before they started charging for it, however, I used both the Verizon hotspot feature as well as some of the root apps just to test. I had no problem getting it to work, but I have heard cases of people having problems/issues getting the tab to tether on certain ROM or with certain apps.
The other thing is that we may speculate all we want, but the fact is that no here really knows whether or not Verizon will at some point have the ability and/or motivation to shut down tethering using the known root apps. Maybe they will, maybe they won't...maybe they can't? (although trust me, if they get suspicious, they can probably figure out that you are).
I don't really want to get into it...but I'm not sure why it wouldn't be "fair". I hate having to pay a fortune for data as much as the next guy, but it's not like the contract with Verizon that you have for your cell phone should entitle you to data for "every mobile device you own"
My point is that it right now, if you wanted to tether your tab it should work, but you should be willing to accept the fact that (a) you may not be able to in the future without paying for it and that (b) you are violating your TOS if you choose to do it.