Some guys in California, Mike Outmesguine, John Hering and James Burgess, have managed to connect to an ordinary Bluetooth cellphone from 1 kilometer away, using off-the-shelf stuff, including a high-gain antenna connected to a Class 1 Bluetooth adapter kit. Their conclusion: “A typical unmodified cell phone can be reached at a distance of one kilometer by using slightly modified equipment on only one side of the link. Imagine the possibilities with modifications on both ends of the link!”
Some folk on Slashdot agree. Someone called Carbolic (who may or may not be related to the actual testers), points out the implication: “now it’s easy to Bluesnarf without even being near the target phone”. (Bluesnarfing is the trick whereby someone else can grab the contents of someone else’s phone — even make calls with it — using Bluetooth. Some more posts on that here.) I’m no techie, but it does seem to undermine those arguments that we keep hearing that somehow Bluetooth will never be a security issue because it only works within a few metres.