Bluetooth was originally developed by mobile phone company Ericsson in 1994. Looking for a unique name for the technology, they settled on "Bluetooth" after a tenth century Viking king called Harald "Bluetooth" Blatand. During his reign, he united Denmark and Norway, and was well known for his ability to help people communicate. Presumably, Ericsson's hope was that Bluetooth technology could do the same.
In order to use Bluetooth wireless technology, a device must be able to interpret certain Bluetooth profiles. The profiles define the possible applications. Bluetooth profiles are general behaviors through which Bluetooth enabled devices communicate with other devices. Bluetooth technology defines a wide range of profiles that describe many different types of use cases.
In order to 'pair' one Bluetooth device to another, a passcode has to be exchanged between the two devices. When you first connect, one machine will ask you to enter a passcode... enter any 4 digit number. The other device will then ask you for a passcode. Enter the same 4 digit number. It doesn't matter what the passcode is, as long as you enter the same number at both ends.
If you have a Bluetooth-enabled mobile phone, then you can use Bluetooth to beam your photos and other objects from your phone to a PC or laptop. You'll need to have Bluetooth on your PC (if it doesn't already have Bluetooth, see our other FAQ on this). With Bluetooth switched on on both the phone and PC, you need to 'pair' the two machines, and then you can use the software on the phone and PC to transfer files.
Bluetooth and WiFi are both radio technologies, but they differ in the frequencies and protocols that they use. They don't interfere with each other, but the two don't talk to each other either - in other words you can't get a device with Bluetooth to communicate to a device that only supports WiFi