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You don't need custom kernel to for hotspot.

Some Kernels/ROMs may run it better but you don't need to run it.

Also you need to goto Market for "WIFI for rooted users".

Some ROM's have a patch for the Sprint Hot Spot. But I find the Market apps works better any way.

I've read you should never OTA update while rooted or you can lose root permanently.

Don't know why or if true, just that I recently read it.