The first step to setting up the hotspot is opening the settings screen on your phone. To do this press "Menu" on the home screen and then click on "Wireless & networks". Inside this menu you should see an option saying "Portable Wi-Fi hotspot settings". In here set up the name of the hotspot and a password (if you want to have one) and then click on the tick box beside "Portable Wi-Fi Hotspot".

After doing the above you will need to scan for Wi-Fi connections on your laptop
and find the connection that has the name you set up on your phone. As I was using a HTC Wildfire for this example Ive set up the connection as "HTC Portable Hotspot" though feel free to call it anything you wish.

After doing this you "should" be ready to go. For some reason whilst doing this guide I managed to stumble into some form of problem, clicking on "OK" seemed to send Windows into correcting the error. Repeated attempts to replicate the error havent seen them come up so Im not too sure what the error ACTUAL LY was.
To stop the connection go back into the "Wireless & network" settings and untick "Portable Wi-Fi hotspot".
Whilst its a useful feature and it is well implemented in phones running Froyo a few issues do need to be pointed out before you start. Firstly using a phone as a Wi-Fi hotspot will drain the phones battery at a quicker rate than usual which can be problematic though maybe a bigger issue is that the phones internet allowance will be eaten into. Unless you are on an unlimited internet deal Id advise being careful when using a phone as a hotspot as you can run up a bill from the network data.
Its also worth noting some networks have made it difficult to use a phone as a modem, often if you call your network they can help you sort out any issues and barriers theyve put in their users way.
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