You must have MyWi On Demand installed on both the iPhone and iPad.
It tethers very well, although not absolutely instantly. It works fine for me.
However...I subscribe to an AT&T 4GB tethering plan.
If you do not have a legitimate data plan, then there is a possibility you'll be found out and back charged. It does not happen all of the time, but there are persistent reports that it happens *some* of the time.
It's up to you whether or not you want to take that risk.
In my case, my iPad 2 WiFi version connects very well to my iPhone 4 with a tethering plan and it works well for the short periods that you would want to use an iPad with slow data when you're out in the field away from a good, fast signal.
It's kind of "neat" but don't lose your focus and think that this is going to be a substitute for a good high speed WiFi connection.