To successfully share your connection you’ll need to set up the ad-hoc wireless network from scratch. Besides an active wired internet connection at the time of setup, here’s what you’ll need:

Network Manager 0.7 or later release
dnsmasq-base installed; a DNS proxy and DHCP/TFTP server

NetworkManager comes pre-installed with all Ubuntu releases since 8.10 so the only installation requirement should be that of dnsmasq-base; you can install easily by using this command:

sudo aptitude install dnsmasq-base

Once you’ve confirmed installation of both Network Manager and the dnsmasq-base package you’re ready to move on. Access the network management screen by clicking on the Network Manager icon and select “Create New Wireless Network” to begin setting up your ad-hoc wireless network. Enter the network name and choose the wireless security level when prompted to complete the network creation. Once you finalize the settings you should see a new available SSID, enabling you to share your connection with no further customization or network settings needed.