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Abe,
They're not the same thing but somewhat close.
tethering allows one device to access the internet thru the Droid, similar to PDANet.
Wifi HotSpot allows up to 5 devices to connect to the internet thru the Droid, but you don't have to connect them, they connect wirelessly. this is more like how MiFi works. It would easily allow me to connect my IPod Touch, and my laptops to the internet thru my phone all at the same time.
I could also let me buddy sitting next to me get connected to the internet.
No problem. I have PDANet which works well for me and my DX is not rooted, but if I could get Hotspot capabillity by rooting, I might want to do that.
I wouldn't even mind spending the $20/month for hotspot, but they have a 2GB limit, and though when I was using my MiFi, which I loved, I never used more than 500mb in a month, I just hate little 2gb limits like that.
hey, I'm sorry for this, it may seem like a stupid question, but I cannot for the life of me figure out how to install the bootstrap from Koush, it's not a .apk file