Bluetooth Mate connection issues

Hello everyone --

My first post!

I'm trying to make a bluetooth capitative touch button. It's just a touch breakout -> arduino pro mini -> bluetooth mate silver.

On the sketch side, I'm using SoftwareSerial to make the bluetooth connection.

My mac recognizes the device, and can pair with it. But the "connect" LED never turns green, the "stat" LED continues to blink (1/sec), and after several seconds the mac loses connection. When I try to run the Processing sketch to receive data, it doesn't run saying the port is busy.

Has anyone had any luck with this? I'd really, really appreciate the help.

#include <SoftwareSerial.h> 

int touch1 = 8;
int val = 0;

int bluetoothTx = 2;  // TX-O pin of bluetooth mate, Arduino D2
int bluetoothRx = 3;  // RX-I pin of bluetooth mate, Arduino D3

SoftwareSerial bluetooth(bluetoothTx, bluetoothRx);


void setup()
{
  pinMode(touch1, INPUT);
  pinMode(bluetoothTx, OUTPUT);
  pinMode(bluetoothRx, INPUT);
  
  bluetooth.begin(9600);  // Start bluetooth serial at 9600
  
}

void loop() 
{
  while (digitalRead(touch1) == LOW)
  {
    bluetooth.write(128);
  }
  while (digitalRead(touch1) == HIGH)
  {
    bluetooth.write(129);
  }
  delay(10);
}

Ooop, mistake on my original post: the "stat" LED is blinking at 2/sec. Apparently this is the config timer, which should only last a minute. It never leaves this mode.