How to Turn your iPhone 4 or iPhone 4S into a WiFi Hotspot
If you are out there a you need an internet connection badly on your notebook or laptop but you
have no hotspot or Wifi available. If you are one of iPhone 4 or iPhone 4s user, then you have to leave your worry behind. You have friends with you who need also internet connections? Why not. Using your iPhone 4 or iPhone 4s you can use up to 5 devices at once. Great isn’t it?
Next step is how to turn your iPhone 4 or iPhone 4s into a a WiFi Hotspot? Then you have to follow these few simple ways to set it up.
How to set up your iPhone 4 or iPhone 4S into a WiFi Hotspot
1. Go to the settings menu

2. In settings, you’ll see a ‘personal hotspot’ menu item. Tap it.

3. In the personal hotspot menu, slide the “personal hotspot” option to “on”.
You’ll note that Apple has allocated the connection a default password which is shown on this screen too. You can either use it (as each iPhone 4 gets a different random password) or change it to something you can more easily remember by tapping on it.

4. Then, on your computer’s Wi-Fi menu, you should see your iPhone pop up in the list after a few seconds. The network name is the name of your iPhone in iTunes — in our case, “Dan’s iPhone 4″.

Once the network is selected and you’ve put in the password you selected in the last step (or Apple’s default password), you’ll be able to connect your tablet, laptop and any other Wi-Fi device to the net via your iPhone’s data plan.
You should remember that it used up quite a lot amount of your battery, so make sure that the battery is fully rechared for a quite a long time of usage.
Source: http://www.ausbt.com.au/turn-your-iphone-4-or-4s-into-a-personal-wifi-hotspot-but-not-ipad-3g-or-iphone-3gs