Yes, Froyo is capable of infrastructure mode, but the hardware chip must also be capable. I own an original Droid, and it is not capable even though I am running Froyo. I believe the Droid 2 and Droid X are capable from what I have read, as well as some HTC models. However, you will want to check with the vendor to make sure before you purchase.

Be aware that Verizon will charge an additional monthly fee for wireless tethering (believe it is $20), and you get limited data with it (2GB?). I think it is criminal that the data consumed through tethering is not included in your "unlimited" data plan.

Of course, you can always root your phone and install third party wireless tethering apps and totally bypass Verizon's tethering plan. Not hard at all to do, it seems a bit scary but if you can read and follow instructions it is a snap. And works well.