What I have experienced is that when connecting to a device with Bluetooth - in this case a Sony SW2, but have also tried Bluetooth headsets - it has problems pairing.
The phone sees the BT device as an available device, and when I select it, it starts the pairing process. Initially it seems to be ok and successfully pairs for 2-5 seconds, the the device is relisted as an available device, but not connected. I have had success twice. The first time was immediately after rooted my phone, and this was ok for several days, even rebooting my phone and the watch didn't seem to cause the issue again, but then it randomly stopped working. I was unable to connect until flashing with the 0.8 ROM. At this point is was again working for about 24 hours - even better than before - until I switched the watch off. Since then I have been unsuccessful in pairing again.
Interestingly, when I try to pair with my Galaxy Tab 2 I have the same problem, UNLESS I initiate the connection with the tablet, then it is fine.
I know that there were problems with the Bluetooth stack on 4.2.1 when it first came out, and it may be related to that, but can anyone offer suggestions as to what else I can try?