I read a post from Tulse today and found the problem to answer my question. So if you have been battling with using the Keynote Remote with Bluetooth, read on:
I'd like to thank you. I have just come across your post ref NOT to pair the iPad with iPhone.
I purchased the Keynote Remote app some time ago with the intention of using my iPad 2 for presentations so that I could fly with only carryon luggage even when restricted by some airlines to 7kg.
Could I get it to work - no. Until I read your post this morning.
It became clear that the reason it wouldn't work is because I was pairing the iPhone with the iPad before trying to connect with Keynote on the iPad and Keynote Remote on the iPhone.
So I turned off wifi, turned off bluetooth and started as you had suggested by just using bluetooth and pairing Keynote on the iPad with Keynote Remote on the iPhone. It works!!!
For anyone else reading this who is trying to do this with an iPhone 3G - it works; that's what I'm using. So thanks again - well done