The Motorola DROID Android 2.2 update is expected to start this week although the update will lack a few features that are to be found in other devices running the Froyo update.
Both tethering and the Wireless Hotspot functions will be missing for Droid users. The reasons for the lack of these two "wanted" features is due to the hardware not being capable of supporting it.
'The Droid by Motorola doesn't have [the] hardware to support a mobile hot spot, a Verizon spokesperson told MobileCrunch. 'With tethering there is no connection on the PC side that will allow you to tether the device, so the answer is: That option isn't part of this update.
The main concern here isn't really that Verizon has pulled the features due to a lack of hardware support on the device, instead it's that Cyanogen and other custom ROMS have in the past enabled this feature on the device which indicates that it isn't a hardware problem.
It kind of makes it a little unbelievable when Verizon make claims like this. We suspect that the hardware is just fine and that it's more related to a business decision to push users in to upgrading to the latest version.
Wired has an in-depth look in to the problem which is well worth a read over here.