Wi-Fi and Bluetooth can both be used to set up wireless networks. However, the technologies are quite different from one another. Wi-Fi works great in LANs while Bluetooth is perfect for Personal Area Networks (PAN). In fact, the only similarity that exists between the two is probably the fact that both of these technologies are wireless and make use of the same frequency to operate. Here are some of the basic differences between the two technologies that you should know.

1. Available data transfer speeds: Wi-Fi will win hands down over Bluetooth on any given day in this category. Wi-Fi is a full-fledged networking technology, aimed at providing smooth connectivity and high data-transfer speeds. Wi-Fi is capable of providing data transfer speeds of up to a blazing 11 mbps, while Bluetooth still crawls at approximately 700 kbps.
2. Number of devices supported: Wi-Fi is a multi-point network protocol, and can support a large number of devices with the help of wireless routers and access points. Bluetooth is a point-to-point networking technology, and has the capability of supporting a maximum of only 8 devices, rendering it almost unusable for any serious networking task.
3. Range of transmission: Theoretically speaking, Wi-Fi does not have any fixed range of transmission. You can extend the reach of the network indefinitely by adding extra wireless routers and access points to the network. Each router and access point will be able to transmit data to a PC or laptop located within a distance of around 30 meters. A Bluetooth device, however, will not be able to connect to any other Bluetooth device placed outside its rather small, 10 meters (approximately) range.
4. Usage of power: Finally, Bluetooth manages to score above Wi-Fi. Bluetooth devices are well known for the power saving capabilities. This is one of the reasons why Bluetooth is considered for handheld devices, such as Palmtop PCs, PDAs, cell phones, etc., where power consumption needs to be managed very carefully.

One very critical problem with using Bluetooth and Wi-Fi simultaneously in the same network is that both of these technologies use the same frequency to operate. Thus the transmission of the Wi-Fi devices in the network may be disrupted by the transmissions made by the Bluetooth devices.

This is the reason why the usage of Bluetooth devices is usually discouraged in office premises where there is an active Wi-Fi network.