Tethering means to turn your phone into a wifi hotspot. This effectively makes your phone perform the same function that a 3G radio in a 3G iPad performs. Some phones provide this functionality; others don't. Most of the smartphones released in the last year have the capability. The simplest way to accomplish tethering is to call your phone service provider and ask them to add tethering to your existing phone data plan. Typically this costs about $20 per month. Your carrier will then tell you how to set up tethering on your phone. (It's typically done by turning on the feature in the settings menu of your phone.) Once done, your iPad will recognize your phone as a wifi source. Connect to it just as you would connect your iPad to any wifi network and the phone will then connect to the internet just as it does when you're using the phone to surf the web.
If you don't want to pay the $20 per month tethering charge, there are ways to activate tethering on your phone without informing your carrier. This typically involves "rooting" (on an Android phone) or "jailbreaking" on an iPhone. If you go this route, be aware that you are almost certainly violating your contract with your phone carrier. And while they cannot (or will not) determine that you are tethering another device to your phone, they will keep an eye out for spikes in your usage of 3G on the phone and may conclude your are tethering another device to use the phone's data plan. If that occurs, they can decide to charge you for doing so or may cancel your contract (though the latter is unlikely.)
