My PC doesn't have in integrated Bluetooth.
After disabling my on board serial port, I only have Com1 and Com10 returned by Serial.List()
Device manager shows 2 Bluetooth devices. One on Com9 and one on Com10.
Since my last post, I have installed the arduino software on Windows XP and the same issue is present there. The only difference is, several COM ports are listed, but not both Bluetooth COM ports.
Additionally, I purchased a bluetooth shield and it is suffering from the same error. So, this seems to be a system side issue but not specific to 1 PC or a specific bluetooth module. I have an Ubuntu system as well, but haven't tried it yet because I'm not sure how easy I'll be able to find compatible bluetooth drivers for either one of my dongles.