How to use bluetooth to connect two iPhone?

You can connect two iPhones and transfer data via Bluetooth using either the high-level GameKit framework or the lower-level (but still easy to work with) Bonjour discovery mechanisms. Bonjour also works transparently between Bluetooth and WiFi on the iPhone under 3.0, so it's a good choice if you would like to support iPhone-to-iPhone data transfers on those two types of networks.

For more information, you can also look at the responses to these questions:

• "where can I find iphone sdk 3.0 GameKit tutorials for developing P2P applications?"
• "iPhone to iPhone networking"
• "GameKit in iPhone SDK 3.0"
• "Is iPhone bluetooth function limited in OS 3.0?"

Check out the BeamIt open source project. It will connect via bluetooth and WIFI (although it claims it does not do WIFI) and I have verified that it works well in my projects. It will allow peer to peer contact easily.

As for multiple connections, it is possible, but you will have to edit the BeamIt source code to make it possible. I suggest reading the GameKit programming guide