The "Tether" app in Cydia only works for 3.0 and 3.0.1 as of now. 3.1 users will have to wait until 10/10/09 to tether on jailbroken 3.1. For those who don't want to wait it out, here's a step by step tutorial to downgrade to 3.0: http://www.benm.at/tutorials/howto-iphone-3g-firmware-3-1-downgrade-os-x/
Note: This will only work on Mac OS X and iPhone 2G/3G, NOT 3GS.
Note: This will only work on Mac OS X and iPhone 2G/3G, NOT 3GS.