*moved to the Android Lounge*
Rooting is simply acquiring administrative access to the file system. It allows you to make changes to system files and folders that you normally would not be able to change. Once you have rooted your phone you can grant permissions to access any part of the phone;s file system. This can be handy and powerful, but also dangerous if you don't know what you are doing.
As to tethering with unlimited data, there are several issues, most prevalent in the U.S. First, most U.S. carriers require a separate data plan to tether at all. These, as far as I know are not unlimited. Second, many offering unlimited data plans have certain usage restrictions where if you use a specific amount of data during the billing cycle, they throttle back your internet speeds to discourage you from using that much data in the future.
You really need to look to your carrier and see what they offer and what they require.
