Being able to tether a 3G phone to a laptop is a delight when you need connectivity. Now, a developer has released a tethering app for the Android-powered G1. The only problem is that it's not an official app, and it's a pain to set up.The process is quite experimental right now, but it enables a user to share the G1's Internet connection with a laptop. From Android Community:

1. Install the app on your android phone, by clicking here (from your phone browser, of course)

2. You might have to change your settings to permit apps that don't come from the Google Market by going to your home screen and choosing MENU > Settings > Applications > Unknown Sources

3. Turn USB debugging on on your phone

4. On your G1 go to the home screen, press MENU > Settings > Applications > Development, then enable USB debugging

5. Follow the instructions here to install the Android driver -- you'll need to do this on Windows and Linux but apparently not on the Mac.

6. Download and install the Android SDK for your computer platform

7. Plug your phone into your computer

8. Choose Proxy App from your phone's menu

9. Press the "Start Proxy" button on your phone

10. Move to the directory that has the adb utility, using inside the Sdk Tools folder and run: Windows: adb forward tcp:8080 localabstract:Proxy Linux/Mac: ./adb forward tcp:8080 localabstract:Proxy

11. Now you should have a proxy server running on port 8080 of your own computer that will relay the information over the Android Debug Bridge to the Proxy App which will relay it on to the Internet

12. Set your Firefox proxy : Options > Advanced > Network > Manual Proxy Configuration: HTTP Proxy: localhost Port: 8080

So it's not really a tethering app, but more of a Web-sharing proxy. This probably won't help the vast majority of users, but it is a good step forward to a full-fledged tethering app. Of course, that may not make T-Mobile jump for joy. It will be interesting to see how truly open the Android phones will be. For all we know, T-Mobile may put the pressure on Google to use its kill switch on apps that eat into the carrier's revenue.