I have Ubuntu Karmic in netbook (Lenovo Ideapad S10). After installing updates (update manager called it partial upgrade) I see a new option to turn off or turn on bluetooth from the bluetooth icon in top panel
Below screenshot shows bluetooth turn off option
Below screenshot shows bluetooth turn on option
I have Ubuntu Karmic in my netbook installed along with Arch Linux. I have shared my home directory between Arch Linux and Ubuntu Karmic so used a different user name (a yaksha my favorite character in Mahabharat who questions King Yudhistira) to avoid conflict!