One of the more frustrating issues with iPhone software/firmware 1.1.3, as noted yesterday, is the sudden incompatibility of some previously working Bluetooth devices -- particularly GPS units from Garmin (StreetPilot C550, Nuvi 360, 760, etc.), some integrated car Bluetooth systems and more.
The fix for these issues has now been discovered, though its less than ideal: Connect your iPhone to your Mac or PC then press the "Restore" button in iTunes. When prompted, choose the option "Set up as new iPhone." Once the phone has been restored, re-attempt pairing with the problematic Bluetooth device. Unfortunately, this solution will result in the erasure of some custom settings on the phone.
UPDATE: A few less intrusive workarounds have been successful for some users:
Reset Network settings Tap Settings, Tap General, Tap Reset, Tap Reset Network Settings. This will cause your iPhone to restart, and will delete any stored Wi-Fi passwords as well as DNS settings and more. It may, however, restore your ability to pair with and use Bluetooth devices.
Toggle Airplane mode Turn Bluetooth off, then navigate to Settings, then slide Airplane Mode to On, wait a few seconds, then slide it back to Off. It seems that discontinuing and restarting the EDGE and WiFi components in the iPhone can restore connectivity.
iPhone Atlas reader Brian Dose, who experienced success with this workaround, writes:
"The restore option did not work for me when I tried it, however I found a way that worked for me that did not involve restoring at all. I turned the Bluetooth off. Then I went and put my Iphone into airplane mode. I then went back and reactivated the bluetooth. After picking re-enable, the bluetooth worked just fine and I didn't have to do a restore. Hope this works for others as well."