I have the Microsoft Wireless Optical Desktop for Bluetooth. I have both a Bluetooth radio in my laptop itself, and the receiver supplied with the keyboard and mouse. In the past everything has worked fine on my computer. Recently i had to reimaged my laptop and got SP2 when i got the new image. Since then i cannot connect the mouse and keyboard either through the built in bluetooth or from the receiver. Microsoft had a software update that was supposed to fix it, but it still doesn't work. The computer recognizes that the periperals are there, but they won't connect for use, and i know that the drivers contained in the devices themselves aren't being downloaded to the computer. When i try to get the drivers to download i get a "Bluetooth Service Error: Access Denied". ANy ideas, or anyone with similar problems?

Try to go to Services\Bluetooth Support Service and make sure that it runs under Local System account (Log On tab in Properties window). If not change it and restart the service. If this does not help you may want to read this: http://support.microsoft.com/kb/892891