Steps on Use/Enable Google Nexus One (HTC) as Modem (Android Tethering)
Follow the steps below to make your Google Nexus One phone as modem. Remember, use it at your own risk. Make sure you make a good backup using Nandroid. I am not responsible if you brick your phone.

milly 7:00 pm on February 17, 2010
The easier way: Use PDA Net.
http://www.junefabrics.com/android/index.php
http://www.junefabrics.com/a/
Note: Free PdaNet is trial version. Once trial expires, you can continue using PdaNet for free with limitations to http connections only or purchase the full version.
milly 9:36 am on February 18, 2010
The adventurous way: Root into your phone. MAKE SURE YOU backup your phone first!!
1. Unlock the bootloader:
- Download and extract fastboot here. In Windows, you will also need AdbWinApi.dll. Download here (Included in SDK)
- Run a command prompt / terminal at the directory that contains fastboot executable.
- Type ‘fastboot-windows oem unlock’ or ‘./fastboot-mac oem unlock’ or ‘./fastboot-linux oem unlock’ (depending on your OS).
- Continue bootloader unlocked.
2. Root Nexus One:
Follow the steps here
3. Download Nexus One Addon 0.1 and flash over the existing firmware. Flash, Do not wipe.
4 Download Android-wired-tether from here.
5. Done.
Ref: xda forum