Using the built in tethering on a Nexus S always worked for me just fine. I just tested it on my Nexus 4 and the built in option works fine and I don't have the extra $5 package.
"Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!"
-Patrick Henry, March 23, 1775