I use my Android (HTC Aria) as a wifi hotspot with my iPad all the time. You can definetly do it but you may end up paying. My phone is rooted and running CM7 which has a hotspot option so I don't have to pay for it through my carrier(AT&T). Even though I use my phone as a hotspot it's never for extended periods of time. Usually when I'm waiting for an appointment so I haven't given my carrier a reason to become suspicious.
Your best bet may be to check out XDA Developers and search up your question there.
Good Luck!
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