I'm planning to develop a bluetooth positioning project but i have no idea where to start. I know that we can track a bluetooth device by identifing it's mac address. What i want to know is that can i actually use a bluetooth dongle to retrieve any device near by and send it back to the bluetooth dongle on the server? I don't know where to post this but i planned to use Java to code. I've googled and read all the articles. I understand the concept but i'm still unsure on how.

thanks in advance.

Connectivity between various BT devices is no problem, as long you are able to discover them, establish connection and if connection is approved you would be able to do variety of things depending on particular device capabilities.

However, I'm not sure how you want to achieve positioning system as this is either based on statics positions of known static transmitters or complex calculations like with satellites. You will need to have more then one BT device that will feed your server with data and be static at same time. Nevertheless your biggest challenge are BT devices of which you will try to calculate they positions as quality of each device and it connection will be different. What I mean there are devices that are hardly capable of 10 meters connection, but then there are these which can do 50 or 100m.

PS: My post-grade teacher wanted me to do add-hoc network with BT but I refused.
PS2: Little of topic, in next year or two mobile devices are expected to have new BT, called Bluetooth 2 with capability up to 1km