Hey guys I thought I'd give a small update. I have noticed that people who are using the Windows 7 / 8 /8.1 are having trouble connecting using Eldridge's method.
I have investigated this and found that the problem can be you getting limited connectivity between your Hotspot and 3DS.
Now there is no way for the 3DS to determine if this is happening with your virtual network. The one way you can identify this with a 3DS is if you connect to the Nintendo Zone whilst trying to use Virtual Router and you do not receive a StreetPass after some time, however this is also not 100% guaranteed to tell you.
I eventually worked this out by connecting my Android phone to my Hotspot and it stating I had limited connectivity.
The best way to bypass this was for me was to turn off auto obtaining an IP address and DNS on my 3DS and put my own in.
So firstly go into your connection settings and change Auto-Obtain IP address to No, and then press detailed setup.
My current settings for entering my own network details (for a guideline are as follows)
IP Address: 192.168.137.099
Subnet Mask: 255.255.255.0
Gateway: 192.168.137.001
You may set your IP address for your 3DS to any think so long as only the last 3 digits are different and they range between 002-255
Your Gateway should always be 001.
Please also be aware that your Hotspot might not have the same network IP addresses as the ones listed above. I would recommend you attempt connecting another device such as a mobile phone or tablet and check the settings of the Wifi connection for the right IP address for the network.
After setting your IP address you should be prompted to set up your DNS. This is simple, just make sure your Primary DNS is the same as your Gateway.
(Secondary DNS is not required)
Once this is done save the settings and run Virtual Router and you should get a StreetPass instantly.
Should you still not receive a Streetpass, try using another device to connect to the hotspot and then the IP address settings from that device input them in your 3DS, the connection should then work, but Virtual Router will probably end up identifying your 3DS as a different device for a while, until Virtual Router is restarted.
I hope this has helped. Thank you