You can configure the proximity distance (this is just an approximation because the signal strength is not always the same) and duration and when you move away from your computer, the screensaver is triggered and your computer is locked. When the bluetooth device (phone) is in range, it automatically unlocks the computer, without requiring any input on your side. This is useful for instance if you use Linux at work and want your computer to lock automatically when you leave for a few minutes, etc.

In order for tethering to work, your iPhone must actually have the tethering option enabled. This depends on your network carrier and contract. For iPhone 3.0 OS you can also just install a so-called mobileconfig profile which enables tethering, but this in a gray zone legally. For later firmwares your iPhone additionally needs to be jailbroken and a system file patched which is surely not everybody's thing. Anyway, with that out of the way let's get to the actual setup.