Allthough some Europen operators have data tariffs that are limited to handset usage, but I've never seen software restrictions on a phone (except for the iPhone), that would hinder you from tethering. And except for France I've not seen any operator yet, who actually monitors your data traffic and bills data separately if you do not use a handset browser but a browser on tethered computer (anyway there's an effective workaround by changing your browser's USER_AGENT).
Regarding the mentioned phone there's a much better Android phone available in several European countries, the ZTE Blade sold as "San Francisco" by Orange in the UK and Switzerland (and under several other brands by other European operators). While it runs at GBP 110 in the UK in Switzerland it costs just € 85 and is unlockable easily.
It comes with a 800*480 WVGA display, 600MHz CPU, 512MB RAM and all the standard features Android phones have (AGPS, WiFi, etc.). Debranded ROMs including some based on Android 2.2 (Froyo) are available at
ZTE Blade - Blade.MoDaCo.com - Android @ MoDaCo
However you should be aware that not every Android phone running Froyo supports the hotspot mode, as there are special hardware requirements. E.g. the Motorola Droid and Milestone both have a WiFi-chip that does not support Froyo's native hotspot mode. Allthough there are third party apps allowing to use these phones as a hotspot, too, the phones get quickly very warm, so one should probably better tether by USB.