Hi Gary - which Security setting are you using?
You might need to try out the different options. I couldn't get my laptop to connect via WEP or WPA2, but WPA worked great.
I'm not convinced you need the extra tethering option to use the Wi-Fi hotspot feature (different than USB tethering). I do NOT have that, yet I just connected my laptop to the internet via Portable Wi-Fi Hotspot and ran a google search on said laptop without any trouble, even tooled around a little on Google+ before ending the test and switching back to "normal" : both laptop and phone feeding off of the house Wi-Fi (no good reason to slurp down my phone's data quota while I'm sitting 30 feet from a Wi-Fi router).
I hope that helps
Looks like you're setting it up correctly. Do you have the WiFi/Tethering feature active on your account? If you do not have the $14.99 feature on your line then the hotspot will not work correctly. You may be able to successfully connect a few times without paying for the feature, but once the system tracks your usage and finds out you're using the hotspot it will stop that connection for you until you have the right feature.