Android phone as Modem for PC Net Connection

Using USB cable (USB Tethering) for net connection.

CASE 1: If Android USB Modem Driver is not installed in the PC ?

1. Download the following configuration file (tetherxp.inf) to your Windows XP computer. Typically, you can right click on the link and choose "Save As". (If your browser appends .html to the file name, you will need to edit the name to remove the .html extension.)
2. Downloading the above file may not be possible if your computer doesn't have the Internet Connection already. In that case you download the above file from your mobile first and then move it to PC using USB Cable [ simple ]
3. Use the USB cable that came with your phone to connect your phone to your computer.
4. On the Android phone, press Home, press Menu, and touch Settings to open the Settings application.
5. Touch Wireless & networks > Tethering & portable hotspot.
6. Check USB tethering.
7. When Windows XP’s New Hardware Wizard opens, select No, not at this time and click Next.
8. Select Install from a list or specific location and click Next.
9. Click Browse to browse to the directory where you installed the configuration file you downloaded in Step 1 and click Next. Windows XP uses the configuration file to configure itself to support USB tethering with the Android phone.
10. When Windows XP finishes installing the software for Android USB Ethernet/RNDIS, click Finish.

You can now use the new Windows XP local area network connection provided by your phone via USB tethering. For more information about configuring networks in Windows XP, see the documentation that comes with Windows.

**Note some of the steps are mentioned above are referred from Google Support Link
         
Also refer Android Developer Site

Case 2:  USB Modem is there already

1. Connect your android phone to PC using USB data cable.
2. Make sure the phone’s drivers are installed properly. In most cases, windows will automatically recognize and install the drivers automatically. If it does not, then use the CD which is given along with the cellphone.
3. In your android smart phone, go to Settings -> Wireless and Network Settings -> Mobile networks and select the “Use packet data” option. Also uncheck the “Use only 2G Networks” option.
4. Again go to Settings ->Wireless and Network Settings->Tethering and portable hotspots
5. Select the “USB tethering” option and you should see a blue circle icon in the notification bar. See the below picture.
6. You are now connected to the internet. Just open a browser and start browsing.