Location based services are the hottest applications on mobile devices nowadays and the growth is continuing. Indoor wireless positioning is the key technology to enable location based services to work well indoors, where GPS normally could not work. Bluetooth has been widely used in mobile devices like phone, PAD etc. therefore Bluetooth based indoor positioning has great market potential. Radio Signal Strength (RSS) is a key parameter for wireless positioning. New Bluetooth standard (since version 2.1) enables RSS to be discovered without time consuming pre-connection. In this research, general wireless positioning technologies are firstly analysed. Then RSS based Bluetooth positioning using the new feature is studied. The mathematical model is established to analyse the relation between RSS and the distance between two Bluetooth devices. Three distance-based algorithms are used for Bluetooth positioning: Least Square Estimation, Three-border and Centroid Method. Comparison results are analysed and the ways to improve the positioning accuracy are discussed.