For the benefit of those who are having the problem I was
experiencing....here is the solution

Check out the post on http://ubuntu-
ky.ubuntuforums.org/showthread.php?p=8298037

Essentially,

1. Remove dongle.
2. Press red dot. (reset button)
3. Insert dongle while the red dot is pressed and hold it down for a few 
seconds.

Hope this will help some of you who are having a problem similar to
mine.

-- 
[Karmic Beta] Bluetooth is disabled.
https://bugs.launchpad.net/bugs/447312
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