How do I share a Wi-Fi connection via a Wi-Fi hotspot?
You can't "share" a Wi-Fi connection via a Wi-Fi hotspot.

What is misleading everybody is the inapropriate use of the technical
term of sharing when the function we are talking of is a redistribution.

When 2 PC are connected on the same Wi-Fi hotspot they are truly
sharing the same connection: they are using the same Wi-Fi channel,
they are sharing the router IP public address.

When you start up InternetSharing within System Preferences &gt; Sharing
you are not starting a sharing, but the redistribution of a main network access toward a secondary network access. On this secondary network access,
you are acting as an access router. You are distributing IP private
addresses.
On your primary network access you have a public IP address, on your secondary network access, you have a private IP address, and you translate the traffic IP addresses from the
public side toward the private side and the other way around.
To be able to perform this redistribution of IP traffic coming
from your primary network access toward the same physical access
your OS should be able to present you this physical interface as 2
differents virtual interfaces, typically en1 and en2.

MacOS X doesn't provide such a virtualisation function.

You can't redistribute your Ethernet connection toward your Ethernet
connection.
You can't redistribute your Wi-Fi connection toward
your Wi-Fi connection.

Connectify (on Windows 7) is simply selling a standard function of Windows which permit to create 2 virtual Wi-Fi interfaces on top of
one physical one (see: Wi-Fi hotspot for Windows 7). Then Windows
redistribute the network access of the primary Wi-Fi toward the second one.