I hope this helps. I am sorry that it is in german though, but there shouldn't be a huge differnce (although I think the feature I am looking for is called "personal web-sharing" and not "web-sharing" in english, sorry about that).
It is activated, but no network is created e.g. the airport icon does not change.
I think part of the confusion is what are you actually trying to do?
Internet Sharing, is the ability to make your Mac act much like a cell phone in tether mode. Some limitations:
1. With internet sharing you can't use the same networking standard to share as you are using to receive the internet.
2. Security may not be the same or as good a router that lets you share ethernet on the computer and send out WiFi to another device.
3. Your internet usage on the machine with Internet Sharing will slow down because the bandwidth it uses to share to other devices.
4. No specific folder is shared.
Web sharing, makes your Users-> yourname -> Sites folder the webhost where you can dump raw web files for browsing your own personalized webpages as long as your internet provider lets you share the ports for web sharing.
1. Your internet access will slow when sharing is up because most internet providers give you asynchronous communication, meaning your path to the internet provider is slower than the path from the internet provider.
2. A router can limit traffic into your computer from people trying to access your website.
3. Your machine is not giving access to another computer, it merely is giving them access to your personal webpages.