There is a group of Android developers, Just like  the jailbreak community on the iPhone And they’re able to accomplish this task more legitimately. Android 2.0 is now Open Source, so it becomes  much more easier. It’s possible to Tether your Motorola Droid even today. Just follow below mention steps:

Step 1. First of all you need to  Install PDANet software on your desktop and Phone. when you install it on desktop, if it doesn’t install usb driver automatically , you can use the USB driver (mirror) above to install.

Step 2. Make sure you have USB Debugging still enabled. Connect your Droid to the USB and on  phone, launch the PDANet software. Click on “Turn PdaNet On“.

Step 3. Once it is turned on, you can then go to your PC and “Connect” on the PDANet software on your taskbar. You are done, You have Tethered Droid successfully, enjoy the High speed wireless Internet.

Step 4. (for Bluetooth only) If you need Bluetooth Tethering, first thing you need to do is pair your phone with your PC via bluetooth connection.

Step 5. Once successful, create a Dial-up Networking Connection (DUN). When asked what modem to use, select the Bluetooth Modem Driver. It will ask you for a username and password, select you won’t need to use one. It will ask you to for a phone number to use to dial out. Use “123″ as the phone number.

and done! via Taranfx