Same symptoms here after an upgrade from 9.04 to 9.10 and same detected device 
for my BT dongle.
What I do to have it work is 
* unplugging the usb dongle, 
* $ sudo modprobe -r btusb
* plugg the donggle again
* pray for the BT applet to become "enabled"
* else unplugging
* ...

After a moment I get it work :-/

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Bluetooth doesn't work (hci_cmd_task: hci0 command tx timeout)
https://bugs.launchpad.net/bugs/268502
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