First of all, note that if your wireless card does not support master/hostap mode, you can only use ad-hoc mode, which allows only one device to connect.
Secondly, NetworkManager only support WEP for ad-hoc mode, so don’t select other Security method like WPA. If you don’t want to ask for trouble, select “WEP 40/128-bit Key”.
The setup is indeed very simple. just click the network icon from the top right corner of your screen, select “Network settings”, select wireless, then click “Use as hotspot”, it will setup everything for you, including the secret key, and the SSID, you can click the “configure” button to change some settings, like the SSID, and the secret, but keep the above 2 point in mind.
If everything goes OK, you can connect your mobile device to the hotspot in about 30 seconds. in case of problem, do check /var/log/messages for help.