The whole series of posts about cheap ebay dongles: link.
It seems ebay is really not a good option to find a CSR bluecore4 dongle. As a reminder, these dongles can have their bdaddr (bluetooth device address) changed, and 99% of them work with the sixaxis emulator. As far as I remember, only 1 or 2 users reported a non-working CSR BC4 dongle.
After having tried 2 sellers and only having received 2 out of 7 non-fake dongles, I decided to try another seller. But this time, I asked before buying, so as to make sure I will get what I am paying for. The answer to my question “Is there really a CSR BC4 chip inside your dongles?” was a clear “YES”. Fine, I decided to buy 5.
After 3 weeks I finally received my order. First test, plug it to my PC, see what kind of bluecore revision it is. No revision, not good at all. Try to change the bdaddr. No error for the command, but the bdaddr is not changed. Finally, unplug it, open it, and look at the chip manufacturer: Conwise. Obviously not CSR…
Lesson learnt: don’t buy these cheap ebay dongles, even if it’s advertised as a BC4 (CSR+EDR) dongle!
A good advice I could give is to borrow every dongle you can borrow, and test it. Last solution: get a dongle from a local store.
I bought a pile of eBay dongles and only one worked…and it burned out right away (actually, most of them don't work at all…for anything). Now I have an overpriced store-bought one that sorta works, but still has glitches in movement from time to time (if I shoot while jumping, running, and strafing, it seems to lock up the dongle, and I have to restart the laptop). This is one of the reasons I would love something based on a dev board; they don't change very often, and when they do, they tell you in specific detail what is changed. I would happily buy you a couple of cheap dev boards to inspire you, but I wouldn't want to offend.
It's already "in the pipe", and I already have the necessary hardware, as I own a few at90usb dev boards.
For your "glitches" & connection problems, please read the FAQ, there are a few advices for these issues.
I also suggest you to upgrade to ubuntu 11.04, as it comes with a newer bluetooth stack that may solve some issues.