After a bit of reading over at HowardForums, it seems they're both correct. Media Net works, but it violates the TOS. So far, Cingular isn't billing people for their usage, but they are within their rights to since the terms specifically state that it is not intended for tethering.

Apparently there is a more expensive data plan that is truly intended for tethering, that runs around $80/month. Too rich for my blood.

Hopefully next year the providers will start realizing that they need to simplify things and will roll out some reasonable data plans. T-Mobile already has, let's just hope the others follow.