Ok this is an interesting one and I have no idea how to resolve it.
Brand new Galaxy S2 -
If I connect it to my Google account USB and Wifi tethering disable internet browsing locally on the handset.
If I just setup the handset and don't connect to any Google accounts then USB and WiFi based tether work correctly.
Anyone know a way to pull my Google saved preferences so can find out the difference, or know another way to resolve or analyse the issue.