It appears that the btusb driver has never worked for at least the 
following dongles:

1131:1001 Integrated System Solution Corp. KY-BT100 Bluetooth Adapter
1131:1004 Integrated System Solution Corp. Bluetooth Device
2001:f111 D-Link Corp. [hex] DBT-122 Bluetooth adapter
0a5c:200a Broadcom Corp. Bluetooth dongle

And so when this became the default driver in 2.6.27, some users could 
no longer use Bluetooth. They can generally scan for devices, but no 
connections can be established in either direction.

See the bug report here: 
https://bugs.launchpad.net/ubuntu/+source/linux/+bug/268502

I have the KY-BT100 listed above, and was hoping this would be an 
ordinary regression where I could just bisect and find the bad commit. 
But I soon realized what made Bluetooth work or not work was whether 
hci_usb or btusb was being used. One thing I noticed is that either way, 
I got this in dmesg:

hci_cmd_task: hci0 command tx timeout

This seems to be common to everyone experiencing this issue. Since the 
message is still produced with the hci_usb driver, even though that 
driver works, a (perhaps naive) guess of mine is that the problem has 
something to do with the two drivers handling this error differently.

I'm attaching the output of 'hciconfig -a' and logs of 'bluetoothd -nd'. 
I got different results depending on whether I plugged in the dongle 
before or after starting bluetoothd, so I'm supplying both log files. In 
the hotplugging case, I got these two messages:

bluetoothd[6745]: Adapter /org/bluez/6745/hci0 without an address
bluetoothd[6745]: Can't read version info for /org/bluez/6745/hci0: 
Unknown error 18446744073709551506 (-110)

after plugging in the device, and the applet didn't show a list of 
paired devices to try to connect to, so I just unplugged the device.

In the other log file, I tried a couple times to browse my phone from my 
computer, send a file, and I tried to browse my computer from my phone. 
Then I hit ctrl-C. This is with BlueZ 4.28 and post-2.6.29-rc3.

What other information can I provide to track down this problem?

Brian