I just saw this thread and decided to try it out in my university accommodation - it works!!
I have a couple of questions though.
My backward/cheap university does not have a wireless network and doesn't allow us to set up one of our own (every device connected to their ethernet network must be approved by the IT guys - people actually have to lug their desktop computers to the IT office! - and they would never approve a wireless router). Now, all's well and good when I'm working at my desk, but sometimes I want to lounge around in bed and surf the net and can't really do that with my iMac!
So, using the procedure above, I've connected my iPhone to the iMac and everything works perfectly (and the network is password protected). I just have one reservation. Considering how protective they are of their network, I'm concerned that they'll find out I'm doing this. Will they be able to tell that I'm sharing my hardwired internet connection using WiFi with another device? Will it show up on their logs etc?? I read this on another forum:
"This is a great feature, however, it's important to be aware that activating this while plugged into certain networks can cause problems. For example, if you do this at your university, the network might see the Mac as a rogue DHCP server and it could "bring down the network.""
Is this true?
Presumably if the IT guys are wandering around and scanning for WiFi they'll be able to see the new network, but it's highly unlikely since a.) their offices are far away b.) the network stops working only a few steps away from my room - so my main concern is if the additional device is somehow registered on their computers through the ethernet on my iMac, and, if so, how noticeable is it? I mean, is it the kind of thing that would set of alarm bells in headquarters, or will they only notice it if they look closely?
My last question is why doesn't my iMac's WiFi signal work better? I didn't expect it to work as well as an Airport router, but I'd have thought that my friend two doors away would be able to access it!
Any comments from people more knowledgeable in this area would be greatly appreciated!