Using the 3970 and BT, you can connect to your PC (with it's Belkin adapter) and can ActiveSync. While your Pocket PC is connected to your PC via ActiveSync it can access the Internet as long as your PC is connected to the Internet. This works via cradle sync as well at BT. This is the passthrough connection ppl talk about.
FYI: If you have a BT network access point such as the Pico Blue, your iPAQ could connect to it for direct Internet access, without involving your PC and ActiveSync. This is similar to the way a WiFi access point or an Ethernet router works. Not that I'm recommending it since those access points are still pricy and you don't need one for your purposes!
The thing BT-enabled iPAQ owners complain about is the fact that their PDAs can't access network shares in Windows networks.
-------------------- Lisa Gade Editor in Chief, MobileTechReview