Okay, this is how you do it on a Mac-
1. Open System Preferences, select 'Sharing'
2. Select the tab 'Internet'
3. Configure Internet Sharing- Share your connection from 'Ethernet' (or whatever your connection is), to computers using 'Airport'.
4. Click on 'Airport Options'
5. Name your network, and configure WEP security.
6. Click okay, then click 'Start' to start the network.
Your Touch should now be able to see the network, and connect to it after you enter the password.
I am able to connect and briefly access the internet on my Touch. But then it stops working, I'm not sure why. My Touch is connected, but web pages don't load at all. My work firewall may be preventing access, I'm not sure.
EDIT- Apparently other people are also having problems connecting via Internet Sharing on the Mac to their iPhones. I did find this method-
http://www.analyticsblog.com/analyticsblog/2007/09/howto-use-the-e.html
But I'm not able to configure it correctly, for some reason the app doesn't let me select 'Airport' as the internal network interface.