The question has been closed for the following reason "The question is answered, right answer was accepted" by KevinLockergnome Jun 30 '13 at 17:16
I do not agree with the answers provided thus far, there is more to security than just encryption.
all encryption solves is eavesdropping and (depending on the scheme of encryption used) man in the middle attacks.
these documents outlines the other concerns: http://hassam.hubpages.com/hub/Types-Of-Bluetooth-Hacks-And-Its-Security-Issues
answered Dec 16 '12 at 14:28
bluetooth can be encrypted but it is not a default. Kinda like how you can have open wifi and WPA2 encrypted wifi, you can have secure and unsecure bluetooth.
PS never buy a insanely cheap bluetooth keyboard as they will not be encrypted thus anyone with a good sniffing device (eg the ubertooth), they can keylog you.
Many bluetooth mice are not encrypted since info that is captures is useless without visual context (at which point whats the point of sniffing the traffic from the mouse.
I have a cheap bluetooth keyboard from ebay, (I use it sometimes to type up comments and stuff while in bed, on my tablet, it has no encryption so if anyone was using a sniffer, they would see everything I was typing (It doesn't bother me because I am posting the content in a public area any with the goal of getting people to see it.
answered Dec 11 '12 at 13:18