I have a iPad 3 with Verizon LTE/4G.
If you elect to go the no-contract, one-month-only route, you will be charged a $35 SIM card activation fee on top of the $20-30 for X number of gigabytes for the month. After the month expires, your SIM card will go inactive. If you want another month later in the calendar year, the $35 activation fee will apply again, along with the charge for gigabytes. And so on.
The Verizon rep explained that a contract deal can be cheaper if you travel 4 or 5 times a year, because you'll pay the activation fee only once. There's also apparently a deal where you can let your contract "sleep" for 2-3 months while keeping the contract but avoiding the per-gig charges and serial activation fees - but you have to re-up for a month or two in-between hiatuses to keep the contract vaild. Sounds complicated and hard to track.
As to the iPad-as-hotspot: Remember that if you're using a cellular connection for your iPad when you turn it into a hotspot, any activity by the wifi users will count against your cellular data allotment, because that's how the data is coming into the 'Pad. So it's not like you're streaming a movie over wifi from your unlimited wall-jack broadband - if you're streaming over an iPad-as-4G-hotspot, you're sucking down that huge 5-gig file over the AT&T or Verizon cellular network, and your data allotment will get eaten up faster than Chris Christie's peanut-butter-and-banana pancakes.
