Here we go:
Tab the Menu key and then tap Settings.
Tap Connections then tap More networks.
Tap Tethering & portable hotspot.
Tap Portable WiFi hotspots to turn on.
Tap Ok on the data/battery consumption reminder.
Tap Portable WiFi hotspots (to the left of the On/Off switch), then tap Configure.
You now have the option to change the Network SSID (this is what you will see when trying to connect from another device), the type of security and the password. The password provided is quite long so you may choose to change it to something a little easier to remember.
Once you have finished making the changes tap Save.
You can now search for this hotspot using another device, just select it from the list of available networks and enter the password you created.
Once connected you will be able to see the connected users within the Portable WiFi hotspots menu.
In summary creating a hotspot just means you have told your phone to transmit a wireless signal that your ipad can then find and connect to in order to access the web through the phones 3g/4g or gprs signal.
As mentioned be careful with what you decide to do once you have connected if you go this route as data roaming costs abroad can add up very fast. At the same time you might think that you have only downloaded a couple of emails etc but in the background the ipad has updated a number of apps and finished downloading that movie you had started to download last time you where connected via wifi but then it lost connection.
I would hate for you to return to a huge bill.
Hope this helps and if you get lost let me know