I am missing what people are calling persnickety. I use the Tethering SBSettings toggle turned on my iPhone all the time. When I want to connect my iPad I start iTether and connect. Pretty simple, nothing persnickety about it.
I have the exact same toggle. Nothing but problems when I use it, and yes, I've both made sure it was the correct toggle and followed others' directions who've had success in trying to use it. No idea what's on my phone that might be interfering with it as I've kept things pretty minimal post JB, but obviously something is.
Like any software on any platform, different configurations outside the specific app can and will produce different results. Again, for me, tethering is a VERY occasional thing and basically never a real necessity, so I'd rather deal with these fairly minor issues than triage them. For anyone who uses this on a daily basis, it's a different story.