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Root Tattoo Root

No, do not try it now unless you're somewhat a dev guy. Its not stable, though some guys have had success with it. I'll recommend waiting for an official 2.1 update from HTC after which we'll have loads of things to play with.

EDIT: I meant don't load the coburn64 custom ROM now as its not stable, rooting works just fine! :)
 
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You can install the tweaked version of the Android Market after rooting which will allow you to install many apps which don't show up in the current Market search results on Tattoo, but whether Tattoo would support the WiFi tether app is something that you'll have to find out yourself.
I'd suggest you have a goldcard before rooting so that you can restore the backup in case something goes wrong. But I'll surely try out rooting myself, just that I do not have enough time right now. :(
 
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