Thanks Guys!
I thought Android doesn't support ad-hoc networks? At least older versions didn't, I don't know of 4.x.
Yes, I saw some comments to that effect 'on the net'. But, I'm using android 4.0.3 and it seems to have some kind of support for ad-hoc. I tried the same thing with my windows machine and I was able to ping the tablet from the windows machine (though admittedly the connection wasn't very reliable)
In this case, you can create a "proper" wifi network by making your laptop be an AP, using hostapd.
I tried hospapd, but I didn't mention it because I didn't fully read hostpapd's manual so I don't really know how hostpapd itself connects to the internet (my laptop is connected to the internet through ethernet via a small router).
This is what I get from hostapd
Using interface wlan0 with hwaddr 00:0e:9b:b6:08:f7 and ssid 'test'
wlan0: STA 00:5d:72:45:ed:2a IEEE 802.11: authenticated
wlan0: STA 00:5d:72:45:ed:2a IEEE 802.11: associated (aid 1)
wlan0: AP-STA-CONNECTED 00:5d:72:45:ed:2a
wlan0: STA 00:5d:72:45:ed:2a RADIUS: starting accounting session 519CE763-00000000
wlan0: AP-STA-DISCONNECTED 00:5d:72:45:ed:2a
wlan0: STA 00:5d:72:45:ed:2a IEEE 802.11: authenticated
wlan0: STA 00:5d:72:45:ed:2a IEEE 802.11: associated (aid 1)
wlan0: AP-STA-CONNECTED 00:5d:72:45:ed:2a
wlan0: STA 00:5d:72:45:ed:2a RADIUS: starting accounting session 519CE763-00000001
wlan0: AP-STA-DISCONNECTED 00:5d:72:45:ed:2a
And the tablet hangs at "obtaining IP address" (I'm using hostapd's default config)
I think I'm going to get a proper HW router to rule out any HW problem - I'll reply to the rest of the messages later. Thanks again!