This post is for people getting connection errors.
Some people reported connection issues that were fixed by upgrading the linux bluetooth stack (default one in Ubuntu 10.10 is version 4.69).
Instructions if you want to do upgrade to the latest version (4.91):
System > Administration > Synaptic Package Manager Settings > Repositories > Other Software
Apt Line: ppa:blueman/ppa
Mark all upgrades
I just upgraded to this version and it seems not to cause any issue on my setup. Do it at your own risk!
Note: bluez version 4.91 is now in Ubuntu 11.04.