From MP3Car.com Wiki
Bluetooth technology lets you connect various electronic devices together wirelessly. It is very short range and used most often in wireless keyboards, mice, headsets. However, many cellular telephones come equipped with Bluetooth, allowing them to synchronize with your computer or use a Bluetooth headset, eliminating wires. In addition, Bluetooth cell phones can function as a wireless modem for car PC's, allowing internet connectivity by the mobile computer. Bluetooth technology is intended to allow devices to connect wirelessly with little configuration.
WiFi, in comparison, is a short range networking standard that essentially replaces the ethernet cable that is required to connect to a router for access to other PC's on a network or to the internet. It differs from Bluetooth in that it is simply intended to extend a network connection wirelessly rather than to permit the connection of devices of differing types.
Bluetooth integration with computers is somewhat problematic since the "standard" is implemented through proprietary "stacks" controlled by companies such as Widcomm (now Broadcom) and Microsoft. The Bluetooth stack from Microsoft is relatively new (XP SP2) so Broadcom's is currently the most commonly used stack.
