Make sure the data connectivity is enabled
go to settings>wireless and networks>mobile networks
enable the data connectivity at the top

 

I have the same problem with my Galaxy Y and I tried doing the same procedure you mentioned but I was still not able to resolve the problem. I'm getting a message "DNS Failed" when browsing using another mobile phone and "Local Access" when connecting a laptop. Any additional input on this? Thanks!

 

Here I Mentioned Device A and Device B... For example YHou want to Connect Internet from Device B to Device A... So here is the Steps...

1) Enable Internet on Device B and Disable it in Device A.
2) Enable Portable Wifi Hotspot on both device. Scan and Pair the Device.
3) Once it successfully paired.

You can able to access Device B's internet in Device A. thats it. This method worked fine for me. I Connected my Samsung Galaxy Y s5360's internet to P500 LG Optimus One. So Good luck. I guess it will works for you too.

Remember: You have Disable Internet on the Device where you want to connect other fones internet.
For example Disable Device A's Internet to access Device B's Internet on Device A.

 

Here are the steps that I did.


1. Settings > Wireless and networks > Mobile Networks > Use packet data (Enabled).
(Note: I had my SIM card's GPRS Settings enabled)

2. Settings > Wireless and networks > Tethering and portable hotspot > Portable Wi-Fi hotspot settings (Enabled)
(Note: Tried both Open and with WPA2 PSK security key)

3. I tried to connect my laptop to my Galaxy Y's portable Wi-Fi...then guess what...Access Local Only

4. Tried to connect my Samsung Corby 2..Message: DNS Failed

5. I tried a couple of other mobile phones and tablets to connect to my Galaxy Y's portable hotspot, and got the same result



I'm thinking about re-flashing my Galaxy Y's firmware but that would probably void the warranty on it.

Is there anything else I've missed to do? or is my mobile phone really busted?

 

I have the same problem, always DNS failed and whenever I try to detect the problem in windows 7, the diagnosis is always DNS server not responding

 

but the torrent can download although it's 0.1-0.3 KB/s

 

..if you still problem on this DNS failed..
..try to change sim card..
before i use globe sim card.. and now change it to smart prepaid.. now my galaxy y tethering work..sometime i need to open the security on tethering so that other device can connect..if i don't do that they cant access on my galaxy y tethering.. but if laptop have install samsung kies it okey to not open the security of tethering on galaxy y..

..sorry if i not good on english.. ^_^