That's a safety measure so that the battery doesn't leak from charging it while it's too hot.
The battery gets so hot because you are using a lot of current by doing whatever it is you're doing while you're tethering.
This is also why your battery is discharging so fast too.
This level of use can be somewhat abusive to the battery. it may be going bad on you.
My advice though is to plug your phone in to charge -before- tethering.
This will do 2 things:
1) keep you from draining the battery.
2) Keep your battery cool enough to charge since the charger is supplying the bulk of the current needed to tether.
Most times I'm tethering, I'm either in the car, or on a laptop. when I'm on the laptop, i use the laptop's USB ports to charge, I can only tether as long as I have laptop battery anyways, might as well use it's battery for the heavy lifting, right?
If I'm in the car, I have a car charger. I don't tether much in the car unless I'm away somewhere and just -need- to get my PSP online. Usually, I'm in range of my home WiFi and don't need to tether though