Thank you for your time and effort helping us out here.
I followed the directions above, but missed the part about updating the driver. I just did that, too. My mouse still works, but the MS dongle won't connect to my Palm.
The Bluetooth icon in the task bar is still red, indicating tht it is not running. When I right-click it, there is a a choice that says "Enable Bluetooth Radio." When I click that I get a dialog box entited "Bluetooth Service" that says "Bluetooth radio is turned off. Press Fn+f2 to turn it on."
No matter what I do with the F2 key, there is no change.
My Palm Tungsten T will authenticate with the MS dongle, but will not actually link and perform a sync.