OK, I just tried pairing my Targus Bluetooth Mouse with my 2007 MacBook running Snow Leopard and it paired and worked flawlessly.
I also tried connecting my iPhone to the MacBook Pro which is running Lion, and I had problems there as well.
So, it is an issue either with Lion or the MacBook Pro. Both the Targus Mouse and the iPhone are discovered, however, they both are inoperable. The mouse does not move and the iPhone can not transfer files.