The capability for a smartphone or tablet to also double as a hot spot has quickly become an expected feature of every new device -- the new iPad included. As you may have read in Jessica Dolcourt's post, Verizon includes the hot-spot feature with the iPad data plans, while AT&T doesn't support it...yet.
Using your iPad as a hot spot will allow you to share the iPad's data connection with up to five devices, including your iPhone (FaceTime over LTE, anyone?).
To set up a hot spot on your iPad, start by opening Settings and navigating to General > Network. (Note: you will need to have the Cellular Data connection turned on.)
You can then set up your personal hot spot by tapping on the giant setup button, which will check with your carrier to see if the feature is supported, and if it is, allow you to turn the hot spot on. If your carrier doesn't support it, you'll get an alert telling you as much.
You may notice when you originally launched Settings, the Personal Hotspot feature wasn't listed as a menu item, but after enabling it through the Network panel, it's now listed. Going forward you will be able to access the settings for your hot spot by tapping on this option, instead of having to navigate to the Network section.
You are given the option of using Wi-Fi, Bluetooth, or a USB connection to share your iPad's data connection. The instructions for each method are listed on the Personal Hotspot settings page.
If you decide to use a Wi-Fi connection, you can either use the default password, or set your own password by tapping on the password field. Just make sure the password is at least eight characters and you'll be good to go.
When your hot spot is turned on and there are devices connected to it, the status bar on your iPad will turn blue and give you the number of devices currently connected to your hot spot.
Turning off the hot spot is as easy as going back into Settings > Personal Hotspot and toggling the switch to the off position.