@sealeysonic
I'll try the hotpot thing myself (even without my Xbox or a car
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Just ran a quick test myself on a Sony Tipo in Hotspot mode and managed to connect my laptop to it and then open a browser from the phone to the laptop's web server, knowing it's IP.
Now, specifically to your case - you can ignore for now the popup from the app, click to take you to Wi-Fi options and then come back. Network scan will probably not work, so you will need to determine Xbox IP from XBMC4Xbox > System Info and manually enter it in the app.
The Wi-Fi Hotspot / Access Point API doesn't seem to be very public - I'll see if I can get rid of the popup when in AP mode (was meant to help you enable wi-fi if you forgot to), and more importantly is to be able to determine the IP range for the AP so you can find the XBMC4Xbox with a network scan (currently it scans only on the Wi-Fi IP range).