first you need to go to settings on wifi tether
change divice profile
generic ics/jb (wlan0)
wifi-driver reload
check thisoption
and last
wifi-driver reload 2
check this option too and your good to go
if you dont do this the tether migt show no errors but it wont give you a conecction i just tested and im posting this post whit the internet of my cellphone
also try to download wifi tether version 3.3-pre2 ***EXPERIMENTAL*** thats the one i have rigt now
here is the link
https://www.dropbox.com/s/1v8rlsh9qtqppi7/com.googlecode.android.wifi.tether..apk

 

ok i did more test and it seems to work whitout fall back option but the internet seems faster whit fallback checked i uploaded the exactly the same app if you don have fallbak i gess you need to flash my rom

 

ok taking that of the op