In a nutshell it is a short range, low power wireless networking standard that typically connects peripherals such as keyboards and mice but can also be extended to things like earpieces and music players.
Before the Bluetooth standard became available different manufacturers had their own unique standards and many devices didn’t talk to each other. With the advent of the Bluetooth standard now a manufacturer can build a device with the knowledge that it could be connected to just about any other device.
The most common place that you see Bluetooth devices is hands-free earpieces for mobile devices. Being low power they are accepted as being a better alternative than holding a radio transmitter (i.e. phone) next to your head.
Just about every device these days is Bluetooth enabled and has this ability enabled by default. The two issues with that is to ensure that your Bluetooth connection is kept secure by requiring a password to connect and that having it always enabled, even if not used, consumes power.
Although much more secure than other connectivity protocols, Bluetooth is still a vector through which connectivity can be established to you phone for example. Best practice therefore is to disable it if not in use. This will improve security as well as save you battery power.
Bluetooth is a really handy common standard for connecting devices within a short range and is available with just about every technology you purchase these days.
Image courtesy of Mister GC at FreeDigitalPhotos.net