Barnacle Wifi Tether
Barnacle Wifi Tether provides a powerful way to turn a phone into a Wi-Fi hotspot. The free app has a one-touch hotspot toggle button; if you look within its settings, you'll find options to name your phone's wireless network, set up WEP encryption, and adjust a slew of items such as the wireless channel and DHCP parameters. For $2, you can download the separate Barnacle Wifi Widget, which puts the hotspot toggle right on your home screen.
Note that this app requires a phone to be rooted in order to work. If you aren't sure if your device is rooted, it's safe to assume that it isn't.