Following on the heels of the rumors last week regarding tethering support, Microsoft’s Director for Windows Phone 7 (Brandon Watson) announced on the Windows Weekly Podcast (at 1:05:40) that tethering will be supported at launch, but it will be up to the carrier whether it is enabled or not.

This is definitely more in line with what we would have expected, even if it is a little disappointing. What say you? Is tethering one of those key features you were hoping for?

Update: Apparently, Mr. Watson misspoke. According to Paul Thurrot (who was also on the Windows Weekly Podcast), tethering will not be available at launch, but will be a feature added in the future. Thanks monomer!

[via Twitter]