I use a MiFi device to tether my WiFi only devices when I am out of the range. For the life of device, which is like 6 months now, I had only once connected the MiFi to five people. It was painfully slow but as we all were waiting for important emails, we had to share. At all other times, I have had no more than two devices at a time.
So the iOS limitation of iPhone, iPad 2 tethering will not bother me much should I go in the Apple's direction. (Only for iPad 2 as I have decided to drop my iPhone and take on an Android phone for my next phone.) The decision on iPad 2 is purely price. I also know how Apple operates. I have not had much experience with Motorola other than a simple phone a few years ago. So I do not know how Motorola will tread it's tablet customers and the XOOM it self. But if they price the Motorola XOOM right, I will still go that way. Let us see.
The three device limitation is not from AT&T but actually a limitation of iOS 4.3 so it might be a limit on Verizon as well, we will have to wait and see;
....and the next time you find yourself without access to Wi-Fi but in 3G territory, enable Personal Hotspot and share your cellular data connection with your Mac, PC, iPad, or other Wi-Fi-capable device. You can share your connection with up to five devices at once over Wi-Fi, Bluetooth, and USB — with up to three of those connections using Wi-Fi.4 Every connection is password protected and secure. And it’s power friendly, too. iPhone detects when your Personal Hotspot is no longer in use and turns it off to save battery life.But again If you are planing to do any heavy handed data exchange work, better think about mobile data plans (As I write Diordna is writing a post on Verizon /AT&T data plan comparison, we don't want you to pay at the rate of $60 a GB (as with AT&T.$15/250MB)