I've just done it without jailbreak or personal hotspot...
Hi,
I turned on internet tethering on my ancient iPhone 3G, turned on Bluetooth. Then turned on Bluetooth on the iPad 2. Paired the iPhone with the iPad. Made sure wi-fi was turned off on both devices.
Started safari on the iPad and here I am replying to you. Though I'm sure by now you have this figured out...
-m