We knew that Internet Sharing was a possibility with the Mango update. At the HTC public unveil of the HTC Titan and Radar, Jay and Rich were able to confirm things when they spent some hands on time with the two new Windows Phones.
While Internet Sharing will be a Windows Phone feature with the Mango update., Jay reports that an HTC Representative at the event stated tethering would not be possible in the U.K. He was also able to get a snapshot of the settings screen on the Titan (flash reflection and all).
This U.K. prohibition is likely due to carrier restrictions and even though U.S. customers are hopeful to have tethering capabilities, we too may face carrier restrictions. Bad carriers, bad.