Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Download MiWi for your iPhone. You can turn it into a WiFi hotspot where your iPhone broadcasts WiFi and connect your iPod to it., tethering it to your iPhone's 3G and EDGE network.
 
Download MyWi for your iPhone. You can turn it into a WiFi hotspot where your iPhone broadcasts WiFi and connect your iPod to it., tethering it to your iPhone's 3G and EDGE network.

The iPhone has tethering capabilities which AT&T in it's royal screw you over mode has never turned on.

To use the MyWi setup you have to jailbreak your iPhone, something I have no interest in doing.

The best way of doing what you want to do is the purchase a MiFi setup from Verizon, T-Mobile, Sprint, or if you want AT&T, which will be available on the 21st of November. 5 devices can be tethered to one MiFi card. You can get the MiFi card for "free" with a two year contract but if you can swing it purchase the MiFi card out right Then you can obtain a contract free pay as you go data plans. Here is a the link to Verizon's MiFi setup http://www.verizonwireless.com/b2c/mobilebroadband/?page=products_mifi This is a real sweet setup for an iPad. You don't have to spend the extra money to get the 3G version which for now at least is locked into AT&T.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.