Vermin have operated a policy of "the more you buy from us, the bigger discount we can do". Others do the same. I shifted to VM for phone a while ago and because I became a triple play customer the price hike I'd expected was a lot less than previous package+phone deal.
Now if I could persuade them to (a) stop phoning me up to upsell on the phone package, and (b) bail out the local patch box so I get a decent call quality I'd be a happy soul.
My opinion too - although they're now quoting Lovefilm and Netflix as being "proof" that they don't actually have a stranglehold on the UK tv market.
Not to jump to their defence necessarily, but did you check the T&C's to make sure that you're actually allowed to tether? I looked at moving to VM's mobile service last year and all the contracts I looked at were pretty clear - no tethering permitted. Interestingly enough only Three (who I was flipping the bird to) seem to be chilled on the idea that you might want to use your data connection to power a tablet etc.
Got news for you - the latest VM cable router is also a nasty piece of Netgear s**t. Contacted VM because I couldn't even get a reliable signal through one internal wall (usual plasterboard+timber with electrical wiring through it) and was told that "a firmware update will fix this". It didn't, and I ended up closing down the router part of it, and just using it as a cable modem (where it's actually pretty reliable).
Although if you're on VM's ADSL service then you have my sympathies - my dad was on that and the performance on it was not much better than dial up at times. He since moved his provision to BT and that's working pretty well.