How to use my iPhone to connect my laptop to the Internet?

My iPhone is a 3G and I'm running XP on the laptop. For arguments sake let's say I know nothing about computers. Thank you in advance.

You can't connect your iPhone to your laptop just to give you an internet connection. On your laptop connect a Wifi network.

I do this all the time. You need to set a personal hotspot, which your iPhone can broadcast for you. Essentially, the iPhone downloads the Internet over 3G network, then broadcasts a WiFi connection, which your laptop can connect to.

2 questions:
(1) Do you have an unlimited data plan for your iPhone? (It could get costly, if you connect and use your phone to download, as that connection uses your data plan.)
(2) Do you have a WiFi - enabled laptop?

If both are true, or the answer to (1) is that you have a "big enough" data plan… :
1. Under your iPhone, go to the SETTINGS icon
2. Scroll down to PERSONAL HOTSPOT (usually under WiFi); if you can't find it, skip to 2b
3. Turn it ON and set a password of some sort (so others can't connect to your data plan and use your phone), name it so you recognize it (i.e. Bat Phone)

2b. Scroll down to GENERAL, then scroll down to NETWORK
3b. Under network, look for PERSONAL HOTSPOT, make sure it's turned on
4b. Go back up to step 2 (if needed, or if it prompts you, you can probably just go to step 3 above), then do step 3

On your laptop, then go down to the toolbar on the bottom of your screen. On the right side where it displays time, you will have a logo that when you hover it says something like "Wireless Network" or "No Network Available". Open it. Refresh the list of available networks. Find your phone. Double click on it. Enter your password.

DONE!

Doesn't work? Questions? Try this article: http://ipod.about.com/od/iphonehowtos/ss/Use-Iphone-Personal-Hotspot.htm

Note to remember: Your WiFi will always look like it's strongly connected to the Internet; that's because your phone is in close proximity and the WiFi signal is good. However, the strength of the Internet connection changes with your 3G connection strength on your iPhone. Therefore, you can have good WiFi strength with poor internet connectivity.