Bluetooth headset connectivity issue

Hello,

I have a Motorola bluetooth headset.  I'm able to pair it with my phone with no problems, but when I get the phone any farther than about 1 foot away from the headset, the sound gets all muffled and starts to break up.  I've also covered my bluetooth headset with my hand and it's disconnected from the phone.  I've tried the headset with another phone (on another carrier) and have had no problems whatsoever.

I've tried to download the newest sw version (having other issues with that).

Does anyone have any suggestions?

Steve