Can anyone explain what this is? I am using one at work on my mobile and it would seem to be someone elses phone set up as a router, but how does this connect to the internet? Is it using their data allowance?
Only the hotspot device gets charged. That phone is acting like a router, you are connecting like you would to an WiFi router at home with you PC/Laptop.
Sometimes I create a hotspot from my Samsung phone for my Android tablet as it doesn't have 3G. You do use the data allowance. Get one of these, they're fantastic. You can get a 3 3G sim for around a tenner.