Ok, this is as much as I can do. If this doesn't work, then I really don't know what to tell you.
On your iPhone under the settings for any networks you've created for this choose 'Forget this Network'. Next, undo any changes you've made on your Mac from your various attempts. Maybe even reboot your Mac for good measure. Basically, I want you to start fresh. Ok, now follow this.
Step 1: Right-click on the Wifi icon and choose 'Create Network'
Step 2: Choose a new name for your ad-hoc network. Use a name you haven't used before. Of course, if you're doing this out in the wild then I suggest you password protect your network. You probably don't want anybody leeching off your 3G.
Step 3: Now, from the Wifi icon right-click and choose 'Open Network Preferences'.
Step 4: Click on the box next to where it says 'Location' and selet 'Edit Locations...'.
Step 5: Click on the '+' and name your new location. I suggest naming it the same thing as the ad-hoc network you just created. That'll keep things tidy. Click 'Done'.
Step 6: After Step 5 you should see something like this. Make sure that 'AirPort' is highlighted on the left and then click 'Advanced' on the bottom right.
Step 7: Click the TCP/IP tab. It should look like this.
Step 8: Change 'Configure IPv4' to 'Manually'. Enter whatever you want for the IPv4 Address. To be safe, just do what I've done. The Subnet Mask should be as depicted.
Step 9: Go to the Proxies tab, check the box to the left of 'SOCKS Proxy' and then under 'SOCKS Proxy Server' enter an IP that's different than what you entered for the IPv4 Address in Step 8. To keep things simple I suggest simply increasing the last IP number by one. In the port field just to the right of where you enter the IP under where it says 'SOCKS Proxy Server' enter '1337'. Click 'OK'.
Step 10: You should now see something like this where the AirPort device has a green light and says 'Connected' and the Location and Network Name are the same. At this point you can click 'Apply' and close the settings window.
Step 11: On your iPhone you should now connect to the ad-hoc network you created. Enter the settings for that network by touching the little blue circle with a white right facing arrow in it.
Step 12: Touch where it says 'Static' and where it says 'IP Address' you should enter the SOCKS Proxy Server IP you created in Step 9 minus the port number (e.g. 1337). Also, enter '255.255.255.0' for the Subnet Mask. Press the home button to exit Settings.
Step 13: Open HandyLight and touch blue, yellow, red (in that order), and then touch the upper right corner of the iPhone screen just below your battery indicator icon. The screen should turn purple and you should now be able to surf the web with
Safari on your Mac.