Apple launched iOS 4.2.1 at the beginning of this week. Some people running it on an iPhone 3G are reporting issues when the iPhone has been unlocked to use on another network. When doing that, the Internet Tethering option in some cases is removed.
This, of course, is for those running an iPhone 3G that has been officially unlocked as there is no unofficial unlock available just yet for those running iOS 4.2.1.
Reports are early at the moment, so it is unclear how many people this has caused problems for. One thing to remember is that the tethering options can be locked by networks, so perhaps this only affects the 3G trying to tether on certain networks that do not approve, or have tethering enabled.
Via: UberGizmo
Nope,
I confirm 4.2.1 disables tethering option, even though tethering is enabled via carrier.
I was previously using 4.1 and everything was fine, but once updated it disabled tethering option, i can surf in device but can not tether device with Laptop.