Bluetooth is a short-range wireless technology used to create PANs (Personal Area Networks) among your devices, and with other nearby devices.
Bluetooth allows you to leave your phone in your pocket, while talking on your phone with a Bluetooth headset - with no wires. You can also exchange contact or scheduling information with other Bluetooth-enabled phones nearby, or send such information to a nearby Bluetooth-enabled printer.
Another common use is to give your laptop computer or PDA wireless high-speed Internet access via Bluetooth and your phone.
Many newer automobiles also have Bluetooth, which can interface with a phone in a pocket, to allow automatic hands-free phone capability.
More innovative uses include playing a game against someone with a similar phone nearby, or using a special Bluetooth pen to send SMS messages by simply writing them on paper.
Blueooth functionality is divided into seperate types of connections known as "profiles". Each of the various scenarios outlined above involve a different profile. Not all Bluetooth devices support all profiles.
For example, a Bluetooth headset might only support the Headset profile, while others might support both Headset and the similar Handsfree profile, for increased compatibility. Similarly, a phone might only support the Handsfree profile, and not the Headset profile, while other phones might support both.
Bluetooth is named for the 10th century Viking, King Herald Bluetooth.