Actually Android is apparently for people who don't wear seatbelts, don't use helmets when riding a motorcycle, and who text and drive - people who will not be missed from the gene pool.
Just to put closure to this, the situation has been remedied. AT&T is swapping my phone with an iPhone. I talked to a lot of unhelpful, unfriendly, and uncaring customer service people but finally reached someone who understood the issue and was willing to resolve the situation fairly.
It's also confirmed without a doubt that by default Android OSs (at least up to 2.3.x) deny bluetooth control while the phone is locked (PIN/pattern locked, not just screenlocked). As I stated in my original post calling this a security feature is crazy - *most* people don't need this level of security especially when it it compromises the ability to use the phone safely. To have this as a default, unchangeable behavior is asinine.
Those of you who are reporting your phone works fully with bluetooth even when locked are in the minority - either you're just screenlocking the phone (no PIN/pattern required), you're plugging into a device which disables locking (some recent built in car systems have this feature apparently) or you've got a rare model that has bluetooth bypass. Go buy a lottery ticket cause you're lucky!
For now I'm jumping off the Android bandwagon. Good luck and again thanks to those who made constructive replies.