During the iPad event today, Apple announced that the iOS 4.3 update would be available March 11th to coincide with the availability of the iPad 2.

The new version includes a Personal Hotspot feature that will allow customers who subscribe to an Internet tethering plan from their carrier, to use the iPhone as a Wi-Fi hotspot. This allows other devices, such as a laptop or a Wi-Fi iPad to use the iPhone as an internet connection.

Unfortunately the new feature will only be enabled on the iPhone 4. Whether or not this is a hardware limitation or simply a product differentiation strategy, we can’t say for sure.

As we found out a few weeks ago, the new iOS update will allow iPad owners to use the physical switch on the side of their device as a rotation lock once again. The iOS 4.2 release for iPad repurposed that switch to function as a mute for the ringer and other sounds, which irked many iPad owners. From iOS 4.3 on, there will be a preference to change the function of that switch according to personal preference.

Also included in iOS 4.3 is a very welcome addition: iTunes Home Sharing.

Home Sharing is the same system that the Apple TV 2 uses to stream your media files from a computer on the local network, and now iPhones, iPods and iPads will be able to do the same thing. Simply open the iPod or Music/Videos app (depending on your device), select a computer on the local network, browse the available files and play them right over the network.

As we demonstrated a few weeks back, the new iOS 4.3 also includes the ability to send a streaming web video, or a video playing inside a 3rd party iOS application, to the Apple TV 2 using AirPlay.

The newly announced iPad 2 will ship with iOS 4.3, but it will also be a free update for all supported devices.