Yes FroYo (newest iteration of the Android OS, 2.2, Nexus already has a beta version, official version coming soon) has a WiFi hotspot feature which can tether up to 8 devices. I heard carriers can turn this feature off but since it is not purchased from a carrier, I do not think they have the control to.
There are also two programs that can do this on 2.1 called Barnacle WiFi Tether or
android-wifi-tether - Project Hosting on Google Code but you need to be rooted (equivalent of jailbreaking. Superuser permissions)
Also you can purchase apps from the market (PDANet for $30 or EasyTether for $10 which can do a wired tether connection). I know that AT&T blocks them from the market but you can purchase them through the developers site or download them online (don't think that is legal as it is a paid app but you can find it and it does work).