The BT connection is quite usable and great for those moments when you just want to dash out a quick email or check something on the web. The main downsides to using bluetooth are:
1. When using the BT connection the screen will occasionally redraw for no apparent reason. This can be somewhat annoying.
2. The phone is not charging off the Redfly - if you are using a lot of data (either cellular or wi-fi) then it is great to extend the phones battery life by hooking it up to the Redfly.
Make sure you have the 800w USB and Battery Charging Update from Palm installed on your 800w. Everything USB related (including REDFLY) will work better.
Connecting your 800w and Redfly with Bluetooth will help extend the smartphone's battery life a bit because the screen will be off, and that's a major power drain. Still, like dc_in_sf said, as long as the 800w can charge over USB then you can finish up a long session of use with a full charge on your smartphone. -