I think your wrong. Using your phone as a modem, will only let you consume x amount of data per second, depending on signal strength etc. How that data is used is neither here nor there. You can use it to download a torrent or stream a radio station, the amount of data the phone can stream is essentially fixed. Using your phone to download torrents on your pc will give you more kB/s as using the phone to watch a youtube clip.

Networks know they can charge Apple customers a higher price. Apple have been doing it for years, the networks are waking up to the fact so are now cashing in on Apple customers. You have paid for xMB of data...you should be allowed to use it as you see fit. Its outrageous the networks should stop you from doing so.

Agree with ACU. Heavy bandwidth stuff like torrents and youtube streaming etc are one thing. But simple HTTP(S) web browsing traffic, it shouldn't matter to Vodafone whether this is ending up displayed on my iphone's screen, or my laptop's screen via tethering. It should come out of the same allowance. It's akin to Coca Cola saying that I can pay £1.50 for a 500ml bottle of coke if I drink it out of the bottle, but if I want to pour some of it into a glass and drink it from there, I need to pay them another £2. Which would rightly be considered outrageous if they tried, because Coca Cola didn't have to do anything different to get the coke to me or get me any extra coke just because I choose to drink some of it from a glass, so why would they be entitled to extra money. Same with mobile data, if I stay within my package's supplied data allowance, how I use it (i.e. which device the web pages end up being displayed on) should not matter to the provider (in my case Vodafone).

I suspect the reality is that Vodafone (and other networks) know full well that their network won't be able to handle it if lots of people were to start tethering their laptops; it would also expose how ridiculous it is that they still force web browsing through a proxy these days; and I guess it would stop people buying and topping up USB dongles. So they are adding specific charges to tethering to discourage its use (as well as straight forward "oh here's another thing we can charge extra for" greed).

added the bits in bold...

You say that, but it's the same networks that keep pushing mobile broadband. That's where the real greed lies - they're much less likely to be able to flog you mobile broadband if you can the same functionality from your phone. There is no difference in terms of network load from 100 people on mobile broadband streaming Youtube and 100 people tethering their phones and streaming Youtube.

Now, if the networks were able to implement some system whereby mobile broadband traffic gets higher priority than cellphone traffic, it wouldn't be so bad. But at the moment, you get the same speed either way.

According to vodafone they will be charging for tethering. £5 per 500mb block.

Not true. I enabled Personal Hotspot for the first time earlier this week. Tethering was fine before 4.3 on my T-Mobile contract by using Bluetooth or USB Cable. What do I get? A redirected T-Zone's page asking me to pay extra to use the network as a modem device on my iPhone 4. I have to pay for the amount of time I want to use. Anyone got this now?

I know I have an older Flext 180 contract with unlimited (1GB fair-usage now) data as I bought another phone before and the iPhone 4 was a sim-free purchase.

I'm deciding whether to keep my friends and family deal of half price line rental for life on T-Mobile or jump to Three and buy into the their All-you-can-eat. Then that can serve my iPad via the Hotspot. After that, I will only need Wi-Fi only iPad's. I'm not hoping the merger of Orange/T-Mobile is going to improve their contract structure.

Its just that Apple enable network control.
It will change slowly when market share is more at risk.

I suspect networks also think Iphone owners are more willing to pay for 'supposed' extras.