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Well, it sees the phone, finds the device and when tries to connect, I get "Connect error - Can't connect to target device. Reason: Connection refused."
If the connection is refused, either you must first enter a password to both devices for them to connect or the other device you're trying to connect to is very strict with its settings so check those too.
Like others said here, it is very easy to connect the Droid via bluetooth with other bluetooth enabled devices. I can and have paired mine with my computer, bluetooth headphones, a printer, and a bluetooth headset with no need for any extra software on the phone.