This problem drove me mad for some time before I finally found a fix. I can't claim it as my own but I thought it was important to share it with everyone to save them the same stressful time as me.
You have a HTC Desire on the Orange network and have eagerly upgraded to Android 2.2 operating system. After doing this you notice that both the USB tethering and WiFi hotspot functions are not working. After much diagnosis you discover that the problem must be with the phone.
I was exceedingly luck to speak to one of the helpful and knowledgeable operatives at Orange. Most of the time you'll get the answer "It's not supported"
Is surprisingly simple:-
Menu/settings/Wireless&Networks/Mobile networks/Access Point Names
You should see the following three APNs;
You will note that 'Consumer Broadband' is not present in 2.1. Select this option from the menu.
CHANGE the APN from "consumerbroadband" to "orangeinternet"
CHANGE the Username to "Orange"
CHANGE the password to "Multimedia"
Authentication type should be set to CHAP
Press your Menu button, tap "Save"
You should now find that the USB tethering and the WiFi hotspots work again.