I used the Network -> Use as Hotspot button to make a network and I can connect to it just fine. However, no Internet packets are going through to my connected device, an iPod 4G.
How can you create Hotspot successfully in Ubuntu 11.10 for iPod 4G?
I figured out a workaround--it seems the Network -> Use as Hotspot button doesn't work properly, so I clicked on the Networking widget from the Unity panel and selected Create New Wireless Network, which did the job. It's still a little annoying as every time I have to click the menu, go to option, click it, then create a new network or select from an existing network, and then start it instead of a button-push solution; however, it works.