iphone as a modem?

No it is NOT possible with the iPhone but yes it is possible with AT&T. This was one of my initial complaints. I used to do this with my Sony Ericsson phone on Cingular (now AT&T) so I know it works.
Every phone is different and I don't know if your using a Mac or a PC but it was WORLDS easier to do on my Mac than my PC. Basically I just downloaded some modem scripts for my phone, typed in a couple of numbers and hit go! It was reasonably functional too. Not blinding fast, but it worked in a pinch, which is when I used it.
Of course the iPhone HAS a good browser so I could get away without that feature for a little while. I'd still like them to add it though.

I used to do this with my Sony Ericsson
phone on Cingular (now AT&T) so I know it works.

I have tried to do this with my SE Z525 on Cingular with no luck. The phone dials the access number to my ISP then immediately disconnects.
Did you need a data plan to do this?

Looking forward to your reply.

G3s, G4s, G5s & XServe Mac OS X (10.4.9) NOT an iPhone owner. yet.