To get internet tethering working between Ubuntu 9.10 and your iPhone you need to use the blueman project. The blueman project uses the BlueZ API to simplify integration with bluetooth devices. It is not part of the standard Ubuntu 9.10 repositories.
The Blueman Project
To get started, you will need to add the repository for the blueman project. As root:
root@continuity:~# add-apt-repository ppa:blueman/ppa
root@continuity:~# apt-get update
. . .
root@continuity:~# apt-get install blueman
. . .
After it is installed, you may need to start/restart the bluetooth service.
root@continuity:~# restart bluetooth
Enable Bluetooth
If, like me, you’re using GNOME, you can find the new Bluetooth Manager in your menu under System -> Preferences. Start the Bluetooth Manager. Its icon should appear in your task bar. Left-click on the icon to open the Bluetooth Manager interface. At this point, make sure you have enabled bluetooth on your computer (typically a switch or button on your laptop… or even a USB dongle for your desktop).
Enable bluetooth on your iPhone. Go into the Settings application, press the General button, then press the Bluetooth button. Press the Bluetooth switch to turn it on. The interface should now say Now Discoverable.
While you are searching for your iPhone and pairing with your iPhone, you need to make sure your iPhone remains on and unlocked and in the Bluetooth screen. Your iPhone is only discoverable while in this screen.
Pairing
Back to the Bluetooth Manager interface on your computer. Press the Search button. A list of visible bluetooth devices should appear (if there is more than one visible bluetooth device in the vicinity) and one of them should be your iPhone. Your iPhone will be identified by the name you have given it using iTunes (in my case David’s iPhone) or by the default name, iPhone.
If you see multiple iPhones you will need to select the one that has a matching bluetooth MAC address for your iPhone. To determine your iPhone’s bluetooth MAC address, go into the Settings application on your iPhone, press the General button, press the About button, then scroll down to the Bluetooth value. Your iPhone will be listed in the Bluetooth Manager interface with this address as a sub-heading. Take a note of this and make sure you go back to the Bluetooth screen so that your iPhone is discoverable again.
Back to the Bluetooth Manager. Select your iPhone. Click on the plus icon to register it.
For the next step, you will need to select a 4 digit passcode to use to authenticate your computer to your iPhone. Click on the keys icon. A dialog box will appear. Type in your chosen 4 digit passcode and click on OK. Your iPhone should now prompt you for a passcode. Enter the same 4 digit passcode. Your computer and iPhone are now paired.
Enable Tethering
Enable internet tethering on your iPhone. In the Settings application, back in the General settings, press the Network button. Press the Internet Tethering switch to turn it on.
Back to the Bluetooth Manager on your computer. Right-click on your iPhone and click on Connect To: Network Access Point. After a short while, a new network connection should be announced in your task bar. In the Bluetooth Manager, select your iPhone and click on the star icon to indicate that you trust this device.
Finished
From now on, as long as bluetooth is enabled on both your computer and iPhone and internet tethering is also enabled, you will be able to right-click on the bluetooth icon in your task bar and connect to the internet via your iPhone.
While you’re not using Bluetooth and Internet tethering, I highly recommend you disable them on your iPhone and laptop to conserve battery power.