Bluetooth is a wireless transfer format. (like infrared but broader in terms of uses and usage).
Wi Fi is wireless internet.
Thats what those 2 are in a nutshell.
Bluetooth is an industrial specification for wireless personal area networks (PANs). Bluetooth provides a way to connect and exchange information between devices such as mobile phones, laptops, personal computers, printers, digital cameras, and video game consoles over a secure, globally unlicensed short-range radio frequency. The Bluetooth specifications are developed and licensed by the Bluetooth Special Interest Group.
Wi-Fi (pronounced wye fye, IPA: /ˈwaɪfaɪ/), a wireless-technology brand owned by the Wi-Fi Alliance, promotes standards with the aim of improving the interoperability of wireless local area network products based on the IEEE 802.11 standards. Common applications for Wi-Fi include Internet and VoIP phone access, gaming, and network connectivity for consumer electronics such as televisions, DVD players, and digital cameras.
Bluetooth vs. Wi-Fi in networking
Bluetooth and Wi-Fi have slightly different applications in today's offices, homes, and on the move: setting up networks, printing, or transferring presentations and files from PDAs to computers. Both are versions of unlicensed spread spectrum technology.
Bluetooth differs from Wi-Fi in that the latter provides higher throughput and covers greater distances, but requires more expensive hardware and higher power consumption. They use the same frequency range, but employ different modulation techniques. While Bluetooth is a replacement for a variety of applications, Wi-Fi is a replacement only for local area network access. Bluetooth is often thought of as wireless USB, whereas Wi-Fi is wireless Ethernet, both operating at much lower bandwidth than the cable systems they are trying to replace. However, this analogy is not entirely accurate since any Bluetooth device can, in theory, host any other Bluetooth device—something that is not universal to USB devices, therefore it would resemble more a wireless FireWire.
Bluetooth
Bluetooth exists in many products, such as phones, printers, modems and headsets. The technology is useful when transferring information between two or more devices that are near each other in low-bandwidth situations. Bluetooth is commonly used to transfer sound data with phones (i.e. with a Bluetooth headset) or byte data with hand-held computers (transferring files).
Bluetooth simplifies the discovery and setup of services between devices. Bluetooth devices advertise all of the services they provide. This makes using services easier because there is no longer a need to setup network addresses or permissions as in many other networks.
Wi-Fi
Wi-Fi is more like traditional Ethernet networks, and requires configuration to set up shared resources, transmit files, and to set up audio links (for example, headsets and hands-free devices). It uses the same radio frequencies as Bluetooth, but with higher power resulting in a stronger connection. Wi-Fi is sometimes called "wireless Ethernet." This description is accurate as it also provides an indication of its relative strengths and weaknesses. Wi-Fi requires more setup, but is better suited for operating full-scale networks because it enables a faster connection, better range from the base station, and better security than Bluetooth.
All articles courtesy Wikipedia. (Searches: Bluetooth & Wi Fi)