Bluetooth is a technology meant for short distance (except for hacking of course). I learned that fact when trying to retrofit my desktop with BT based wireless K/M. Since the desktop isn't BT-enabled, I picked up a USB dongle out of the thousands floating out there. With a Dell PU705 Travel BT Mouse and a Dell GM952 BT keyboard, I was in business in short order. However I quickly discovered that if I plugged in the dongle in one of the back USB ports, the mouse became pretty jerky in motion. If it's in a front USB port, it worked OK. Not wanting to occupy any of the two precious USB ports on the front long term, I tried remedying it by swapping out the old battery in the mouse, hoping it's the weak battery causing reception issues. No improvement.
Because of the size of my desk and the arrangement of the stuff on it, back ports are about 1 foot farther away to the mouse than the front ones. And one foot might as well be another continent in the world of Bluetooth! I guess the dongle's power isn't that strong, and the mouse is really intended to pair with a laptop that's usually an elbow away. Combined they're powerless (literally!) facing the 5 feet of chasm between them.
Frustrated but refused to extend my poor wrist just to make it work, I decided to bring the port closer. After locating a powered USB hub (Belkin) in the basement, I connected and put it next to the monitor, then plugged in the dongle. That's about 1.5 feet away from the mouse. Man what a difference that made - the mouse movement is now smooth like butter! Does the power of the strength decrease proportional to the square of distance? I can't remember my college physics anymore, but apparently it's just REALLY significant.
For anyone out there struggling with a shaky Bluetooth connection: getting closer can be the easiest solution!