The documentation does not say how many instances can run. Also it does not say if it does/does not support bluetooth https://web.archive.org/web/20110510000057/http://developer.apple.com/library/ios/documentation/Xcode/Conceptual/iphone_development/125-Using_iOS_Simulator/ios_simulator_application.html
I just read the following and found out that it is not possible to have multiple iOS simulator instances running: Is there a way to run multiple iOS Simulators at once?
I wondered if the simulator supports bluetooth at all. Do I need multiple physical devices to test bluetooth?
Can I get away with testing bluetooth by installing my app on one physical device and communicate to another app hosted in the iOS Simulator?
What is the best way to test iPhone Apps that require Bluetooth?
Update...
iPhone running 4.3.3 - Bluetooth is on
Mac OS 10.6.7 - Bluetooth is on and discoverable. Under advance.
Neither my home made app or the GKRocket demo app that ships with the iOS 4 SDK will show the other device from within the app.
Both will discover the other app in the network settings; however, not within the app. I don't know if this is a problem with config or the iOS simulator at this point.