My Samsung Galaxy Fit, which has Froyo also does tethering without rooting.
In this connection (though this may not be any real help to the OP) I noticed something very odd today. I was traveling today and while waiting at the airport, I found something strange happening to the A500.
The A500 picked up the free wifi that the airport offers (two different services). I ignored those and wanted to connect (by wireless tethering) to my phone (aforementioned). While the A500 saw the connection, it refused to connect. It went into the loop of connecting/ disconnecting. Nothing I tried worked. The when I boarded the aircraft, I tried again - this time there were no other wifi connection available except for the tethering with my phone and the A500 connected seamlessly.
Very strange. So, it looks like when there are two or more wifi options, the A500 has a problem connecting - this is the first time I noticed this!
Any ideas why?
Thanks in advance.