[Desire Android Development] PaulW21781:
logcat reveals:

I/ActivityManager( 768): Starting activity: Intent { act=android.intent.action.MAIN cmp=com.android.settings/.TetherSettings }
I/ActivityManager( 768): Displayed activity com.android.settings/.TetherSettings: 241 ms (total 241 ms)
I/wpa_supplicant( 1511): CTRL-EVENT-TERMINATING - signal 15 received
I/wpa_supplicant( 1511): CTRL-EVENT-TERMINATING - signal 0 received
V/WifiMonitor( 768): Event [CTRL-EVENT-TERMINATING - signal 15 received]
V/WifiStateTracker( 768): Connection to supplicant lost
I/wpa_supplicant( 1511): CTRL-EVENT-STATE-CHANGE id=0 state=0 BSSID=00:00:00:00:00:00
D/WifiStateTracker( 768): Reset connections and stopping DHCP
D/NetworkStateTracker( 768): setDetailed state, old =CONNECTED and new state=DISCONNECTED
D/ConnectivityService( 768): ConnectivityChange for WIFI: DISCONNECTED/DISCONNECTED
D/ConnectivityService( 768): getMobileDataEnabled returning true
D/DataConnectionTracker( 847): enableApnType(default), isApnTypeActive = false and state = IDLE
D/DataConnectionTracker( 847): setEnabled(0, true) with old state = false and enabledCount = 0
D/DataConnectionTracker( 847): EVENT_APN_ENABLE_REQUEST 0, 1
D/DataConnectionTracker( 847): dataEnabled = false, enabledCount = 0, isApnTypeActive = false
V/ConnectivityService( 768): Attempting to switch to mobile
D/Tethering( 768): Tethering got CONNECTIVITY_ACTION
D/Tethering( 768): MasterInitialState.processMessage what=3
E/HierarchicalStateMachine( 768): TetherMaster - unhandledMessage: msg.what=3
D/MobileDataStateTracker( 768): default Received state= DISCONNECTED, old= DISCONNECTED, reason= apnSwitched, apnTypeList= default
D/MobileDataStateTracker( 768): default Received state= CONNECTING, old= DISCONNECTED, reason= apnSwitched, apnTypeList= default,supl
D/NetworkStateTracker( 768): setDetailed state, old =DISCONNECTED and new state=CONNECTING
D/ConnectivityService( 768): ConnectivityChange for mobile: CONNECTING/CONNECTING
I/GTalkService( 899): [ServiceAutoStarter] --- connectivity changed
I/GTalkService( 899): [ServiceAutoStarter] --- start GTalk service ---
I/MediaUploader( 1269): No need to wake up
W/Smack/Packet( 899): notify conn break (IOEx), close connection
D/Smack ( 899): [XMPPConn] close connection, notifyClosed=false
D/dalvikvm( 768): GC_EXPLICIT freed 17245 objects / 915912 bytes in 87ms
D/NetworkLocationProvider( 768): onDataConnectionStateChanged 1
D/NetworkLocationProvider( 768): onDataConnectionStateChanged 1
D/WifiStateTracker( 768): Disabling interface
E/Tethering( 768): attempting to remove unknown iface (eth0), ignoring
D/Tethering( 768): eth0 is not a tetherable iface, ignoring
D/MobileDataStateTracker( 768): replacing old mInterfaceName (rmnet0) with rmnet0 for hipri
D/MobileDataStateTracker( 768): replacing old mInterfaceName (rmnet0) with rmnet0 for supl
D/MobileDataStateTracker( 768): default Received state= CONNECTED, old= CONNECTING, reason= apnSwitched, apnTypeList= default,supl
D/NetworkStateTracker( 768): setDetailed state, old =CONNECTING and new state=CONNECTED
D/ConnectivityService( 768): ConnectivityChange for mobile: CONNECTED/CONNECTED
V/NetworkStateTracker( 768): Setting TCP values: [4092,8760,11680,4096,8760,11680] which comes from [net.tcp.buffersize.gprs]
D/NetworkLocationProvider( 768): onDataConnectionStateChanged 1
D/ConnectivityService( 768): adding dns 193.35.132.165 for mobile
D/ConnectivityService( 768): adding dns 193.35.132.164 for mobile
D/ConnectivityService( 768): adding dns 8.8.8.8 for mobile
D/ConnectivityService( 768): adding dns 8.8.4.4 for mobile
D/Tethering( 768): Tethering got CONNECTIVITY_ACTION
D/Tethering( 768): MasterInitialState.processMessage what=3
E/HierarchicalStateMachine( 768): TetherMaster - unhandledMessage: msg.what=3
I/GTalkService( 899): [ServiceAutoStarter] --- connectivity changed
I/GTalkService( 899): [ServiceAutoStarter] --- start GTalk service ---
I/MediaUploader( 1269): No need to wake up
D/dalvikvm( 1010): GC_FOR_MALLOC freed 5467 objects / 323824 bytes in 36ms
D/dalvikvm( 899): GC_FOR_MALLOC freed 2668 objects / 288544 bytes in 33ms
D/NativeCrypto( 899): Freeing OpenSSL session
D/NativeCrypto( 899): Freeing OpenSSL session
D/SoftapController( 744): Softap driver stop: 0
E/SoftapController( 744): Softap fwReload - failed: -1
E/WifiService( 768): Exception in startAccessPoint()
D/LocationMasfClient( 768): getNetworkLocation(): Returning cache location with accuracy 1349.0
D/dalvikvm( 1304): GC_FOR_MALLOC freed 4869 objects / 480072 bytes in 36ms

I think the important part from this is:

E/Tethering( 768): attempting to remove unknown iface (eth0), ignoring

D/Tethering( 768): eth0 is not a tetherable iface, ignoring