Using IPhone as a Wifi Extension?

Hi,

I have this set up at home. A wifi modem in the house, a laptop (PC, Vista) that loves shutting it's built-in Wifi router off and an IPhone 3GS.

I was wondering if i could use the IPhone as a Wifi extender (a.k.a Tether the IPhone to the laptop, and make the IPhone use the Wifi Connection to access the internet WITHOUT using 3G).

The last time I tried tether, I paid and extra $30. I want to know if you can work around without having to use data plan.