I would go to Settings, Wireless and networks, Mobile networks and under GSM/UMTS Network Preferances check that "GSM/WCDMA (WCDMA prefered)" is selected.
Then I would go to (still in mobile network settings) "Access point names" and check they are right for your carrier, you will beable to get the settings from your carrier, They should be posted on the website, if not you can give them a call and they should beable to tell you them.
I am not aware of 2.3.7 breaking BT, perhaps a reflash is in order, the update could have damaged the BT drivers.