Interestingly enough, if I haven't paired the device using the hildon BT applet, but have the right address, it will still connect if the address is right.

I'll have to look further into the wifi degradation. I submitted a bug report (but I thought l2ping was better - doing rfcomm and letting it fail I remember killed the wifi).

https://bugs.maemo.org/show_bug.cgi?id=3238

Maybe the bug should get a few more votes.