Ok, have it sorted:
You need a SIM from a 3G modem. Cut it down using a microSIM as a template (if 3G modem SIM is not a microSIM already). You need to google the APN settings for your carrier, then:
1.) Settings>Network>APN Settings
Enter your APN settings for the 3G carrier under BOTH a) Celluar Data and b) Internet Tethering
2.) Settings > General > Network
You should now see a "Personal Hotspot" option which you can toggle on
I had this happen before with a non-iPhone approved SIM in Ireland. The hotspot option doesn't appear unless you input APN settings.
In my experience a 3G modem SIM on a 12 month contract is the best way to use 3G data on an iPad. You get way cheaper 3G and more data than you could get through (€10/m w/ 10gb for me) and also you get hotspot functionality without the worry of having to top up ever 30 days. If you buy and "official" iPad SIM you'll get neither of these benefits and also you won't even get the option to input a custom APN for Data or tethering as the official SIMs are locked into this 30 day top up rubbish.
Hope this helps guys.
Good luck with the scissors!
Baz