I have an old Windows XP desktop with no wireless capability, a wireless router, and an iPhone 4 running iOS 5.1.1. If the iPhone is connected to the desktop by USB, (how) can I use it to access the router (and the internet) without incurring 3g network data charges?

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    You can't. Just get a wireless adapter for the desktop. – Jason Oct 5 '12 at 19:06

I think what you're trying to do is called tethering. There are several tethering apps available. They require your iPhone to be jailbroken though. Some apps are PdaNet, TetherMe, and MyWi. I know that with MyWi you can connect to the Wireless Network, turn off cellular data in your iPhone, and use it to tether without charges. -Notice, these apps are all Paid apps on Cydia, but if you're jailbreaking your iPhone there are ways to get the apps for free.

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