Ubuntu 7.10 & Bluetooth

I am unable to get a bluetooth mouse working on a new clean install of Ubuntu 7.10 (32-bit)
The computer: HP/Compaq nc6220 laptop with built-in bluetooth (and 802.11g)
The mouse: Kensington Model 72271 Si670m (does not have a dongle).

All other hardware works on this laptop as far as I can tell. It's not great in the game department (Intel 915GM) but overall a great general purpose computer.

I previously tried getting bluetooth to work on 7.04 and the beta of 7.10 but put off any real troubleshooting until a clean install of 7.10 final. I've not installed or changed anything on the default install other than what I've listed here. Looking through previous posts both here and at ubuntuforums.org I've done some basic troubleshooting, but have had zero success.

Here's some info I have:
dmesg:
[ 24.368000] Bluetooth: HCI device and connection manager initialized
[ 24.368000] Bluetooth: HCI socket layer initialized
[ 24.404000] Bluetooth: L2CAP ver 2.8
[ 24.404000] Bluetooth: L2CAP socket layer initialized
[ 24.456000] Bluetooth: HIDP (Human Interface Emulation) ver 1.2
[ 24.644000] Bluetooth: RFCOMM socket layer initialized
[ 24.644000] Bluetooth: RFCOMM TTY layer initialized
[ 24.644000] Bluetooth: RFCOMM ver 1.8

Changed/verified:

/etc/default/bluetooth:
BLUETOOTH_ENABLED=1
HIDD_ENABLED=1

/etc/bluetooth/hcid.conf:
security auto;
(I've also set a pin)

I've installed gnome-bluetooth and rebooted

In a root terminal:
root@nc6220-u:/home/ry# hidd --search
Searching ...
root@nc6220-u:/home/ry#

root@nc6220-u:/home/ry# hcitool scan
Device is not available: No such device
root@nc6220-u:/home/ry#

This laptop has a button that turns on and off the wireless and bluetooth (from what I can tell) all at once. The light does not work (yet) so I've tried it several times using my wireless connection as an "indication" as to it's state. I've run the above commands in both states. Same results either way.

The mouse has a button on it's bottom which is for discovery mode. When presses, the blue LED on top blinks about a dozen times. I've pretty much been pushing this button once every couple of minutes.

There is absolutely no recognition on the laptop of the mouse. I've never seen a bluetooth icon in the panel.
Bluetooth did appear to work the last time I had windows installed on this laptop (several months ago) but this laptop is exclusively Ubuntu at this point. This is also a newly purchased mouse with fresh batteries.

I'm sure I've missed something in here somewhere, so I would appreciate a push in the right direction in getting this mouse to work.

Thanks much.

-Ryandor