What is Bluetooth
Bluetooth is kind of like a low powered wireless radio for small devices like cell phones or other devices that connect over short gaps in proximity.
Its primary purpose was to support wireless activity in simple networking devices, like cellphones, PDAs etc. its range is typically within 30 feet, and can connect at a little less than 1 mpbs. They also feature a dynamic topology known as Pico net or (PAN), which can support between 2-8 Bluetooth peer devices, which communicate through specially specified protocols designed for Bluetooth (existing versions are 1.1, 1.2, 2.0).
The standards are similar to 802.11b and 802.11g, but it can not even remotely be called a replacement for Wi-Fi. It is slower and limited in signal range, plus it cannot support many devices.
However as far as security goes the issue is pretty much the same. It is not that hard to hack into, and is not very compatible with other standards. (It is ratified as IEEE 802.15.1)