5 minutes after I post a message about IBM Integrated Bluetooth and 6310i I got it working. I missed the new PC Suite bluetooth service that came along after upgrading firmware from 4.07 to 5.50. Browsed though 6310i services again and noticed the new service I was not aware of before. Hit connect and bluetooth connection started working immediately. And its a lot faster than infrared.
I have been waiting this for a long long time. I'm really happy now. Thank you Nokia!