Yes, just tell iTunes to restore the phone, but you won't have any problems unless you start to do some really hardcore hacking shit.
To tether, you have a few options. One is going help.benm.at with Safari mobile, and downling the hack to enable developer mode and tethering on the phone. The other, much safer way (ive had problems with benm.at) is to jailbreak. I suggest iPhoneModem or PDANet.