While most of this statement is correct, the answer to the OP's specific question is No. iTether installed on an iPhone will NOT allow you to tether a non JB iPad. iTether is installed on a JB iPad, allowing it to use Bluetooth tethering. The iPad is not natively enabled to do this. This also means that TetherMe on the iPhone will also not alone allow you to tether an iPad--it must be paired with iTether to work with that device.
If you do not want to JB your iPad, as ideal.dreams said, you need a wifi hotspot. Your options are MyWi or PDANet, both of which produce wifi hotspots the iPad can connect to. A few people have used HandyLight and a workaround involving a carefully kludged ad hoc network as well--instructions are posted in the iPad hacks forum--but from a practical perspective this isn't a good option for most folks as a number of things don't work using that setup.