I just did it! It worked! iPhone 3GS on iOS 5.0.1 with an Orange PAYM SIM from my blackberry to an iPad 1 3G
My instructions above we're crap though, sorry about that, they are for iPhone 4.
Turn on Bluetooth on 3GS by going to settings > general > Bluetooth and toggle to 'on'
Still on 3GS go to settings > general > network > personal hotspot and toggle to 'on'
On iPad to go settings > general > Bluetooth > on - wait for it to find the iPhone then select it from the list and click ok on the pop-up's on both devices
No problem, had to check to make sure I wasn't imagining things!
FYI I tried on an Orange PAYG SIM (with plenty of credit on) and it doesn't allow you to turn on the personal hotspot but says to contact Orange if I want to use this feature instead - means OP's 'should' work fine if it allows him to turn on the hotspot in the first place...
Hi all, just got off the phone to apple support ( orange) to whom has activated personal hotspot and I'm now connected. Funny how all the other people I spoke to at orange said it could be done. Thanks to all of you too for your help. Does anybody know if the iPhone 5 is out this year?
Glad to hear you got it working! Now to make sure you have the Orange Your Account App installed on the 3GS so you can keep an eye on how much data you're using!