Sparkfun Bluetooth modem
Here's what I get from the FireFly User Manual:


  Overview The FireFly serial adapter is compact, versatile Class 1
  Bluetooth serial adapter.  It enables
  wireless connections  to any legacy
  serial port and supports
  bi-directional RS232 or RS422
  signaling at a rate of up to 464Kbps. 
  Just  attach the FireFly to your
  device's RS232/EIA232/422 port,
  connect over Bluetooth, and you have a
  wireless cable  replacement solution.
  The transmit range can be up to 330'
  (100M), depending upon environmental
  factors.FireFly Bluetooth adapter
  can be used as a Bluetooth Master or
  Slave device. The SPP connection to
  the unit  appears via a virtual COM
  interface.  Data is sent and received
  on the client exactly as if a serial
  cable was  connected to a real COM
  port on the client.   FireFly can also
  be used in cable replacement mode
  where two Roving Networks Bluetooth
  devices are paired  using the
  configuration switches.  The USB to
  Bluetooth (RN-USB-X) has pairing
  switches and can be used with  the
  FireFly BP to create a wireless
  connection to a PC without using the
  PC’s Bluetooth stack.


The Cable Replacement Application Note indicates that proper Bluetooth pairing is accomplished, meaning the channel is encrypted, either by small switches or with a serial monitor (they use TeraTerm, to which I give a thumbs up).

Looks like a very cool gadget!