From Forum Nokia Wiki

Bluetooth is a specification for wireless personal area networks (PANs) to communicate between two devices. Bluetooth provides a way to connect and exchange information between devices such as mobile phones, laptops, PCs, printers, digital cameras, and video game consoles over a secure, globally unlicensed short-range radio frequency.

It is a radio standard and communications protocol primarily designed for low power consumption, with a short range (1 metre, 10 metres, 100 metres) based on low-cost transceiver microchips in each device.

The devices use a radio communications system, so they do not have to be in line of sight of each other, and can even be in other rooms, as long as the received transmission is powerful enough.

You should use Bluetooth in developing to:

• Develop multiplayer games
• Develop applications that share information
• Communicate with other non-phone Bluetooth device (as a printer, a desktop computer, a microphone, etc.)
• Communicate with a Bluetooth server

You can transfer files using OBEX protocol.

More information:

• Bluetooth Overview
• Bluetooth Protocol