1. turn on bluetooth the phone
2. enable tethering (choose the method, in this case bluetooth) if you do not enable this step the 2 devices will not pair.
3. turn bluetooth on the ipad
4. scan for your phone and pair the 2 devices.
5. from now on the ipad will connect to the internet Using whatever the phone is using, be it wifi or 3G.
I do this daily at work.
Hope this helps.