Had the same problem after upgrade from 11.04 to 11.10.
I have blindly tried
$ killall bluetoothd
$ bluetoothd -d -u -n
and it helped, so I ran
$ sudo -s
$ dpkg --ignore-depends bluez --purge bluez
$ aptitude install bluez
and it's working now.
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https://bugs.launchpad.net/bugs/874634
Title:
[Eee PC 1001PXD] hcitool shows a bluetooth device, bluetoothd is
running, but bluetooth is unusable
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