iPod touch Smartphone as Modem for Touch?

Well, there is an app called imodem that will let your ipod touch connect to the internet threw USB. But you'd have to jailbreak the touch. It's worth looking into.

Yes there is. It works with any windows mobile device that has wifi. I use it everyday with my AT&T tilt and it works flawlessly. It's called wifi router (http://www.wmwifirouter.com) and its really the only reason I got a Touch instead of an iphone
What it does is turns your windows based mobile device into an ad hoc wireless router. In my case I run run the app on my Tilt and it connects with media net's 3g connection. I fire up the wifi on my touch or any other device with wifi and presto, 3g connection on my touch/laptop-whatever.
It's a perfection option, if like me, you want to be able to run windows based programs on your phone yet still be able to take advantage of Safari browser,App store, itunz store and whatnot on your touch. To me its having the best of both worlds. I love being able to have internet access on my touch anywhere I have 3g connection. Only downside is battery life. The touch does ok,but my tilt tends to drain fairly quickly running wifi all the time. It also costs about 20 bucks,but well worth it IMO.

If you happen to have the money for it (it can get a little pricey) check out the cradlepoint router. You can hook it up to a phone or one of those usb network drives that you would usually connect to your computer or laptop http://3gstore.com/

Just as a point of info, I have one of the portable Cradlepoint routers, and took a ride this evening where I had the Cradlepoint plugged into my AT&T Sync (Samsung A707), then had my iPod Touch plugged into a small speaker dock that I plugged into the car's cigarette lighter. End result was that I took a couple hour drive with Pandora playing all the way. Much better than any local station!