Dell Inspiron 1525n Bios version is A16 
wifi:0b:00.0 Network controller [0280]: Broadcom Corporation BCM4312 802.11a/b/g [14e4:4312] (rev 01)

uname -a:Linux titan 2.6.31-13-generic #42-Ubuntu SMP Thu Oct 8 20:04:50 UTC 2009 i686 GNU/Linux

Situation 1) Bios switch setting is set to bluetooth.

			Booting with switch on.
			boban@titan:~$ rfkill list
			0: hci0: Bluetooth
				Soft blocked: no
				Hard blocked: no
			1: dell-wifi: Wireless LAN
				Soft blocked: no
				Hard blocked: no
			2: dell-bluetooth: Bluetooth
				Soft blocked: no
				Hard blocked: no
			boban@titan:~$
			When i turn off switch after login:
			boban@titan:~$ rfkill list
			1: dell-wifi: Wireless LAN
				Soft blocked: no
				Hard blocked: yes
			2: dell-bluetooth: Bluetooth
				Soft blocked: yes
				Hard blocked: yes
			boban@titan:~$

			Both led's for wifi and bt go off, and network manager says wireless disabled.

			When i turn on back switch only bluetooth led turns on.

			boban@titan:~$ rfkill list
			1: dell-wifi: Wireless LAN
				Soft blocked: no
				Hard blocked: yes
			2: dell-bluetooth: Bluetooth
				Soft blocked: no
				Hard blocked: yes
			3: hci0: Bluetooth
				Soft blocked: no
				Hard blocked: no
			boban@titan:~$
Situation 2) Booting with bios set to bluetooth and wifi.
			Booting with switch ON:
			boban@titan:~$ rfkill list
			0: hci0: Bluetooth
				Soft blocked: no
				Hard blocked: no
			1: dell-wifi: Wireless LAN
				Soft blocked: no
				Hard blocked: no
			2: dell-bluetooth: Bluetooth
				Soft blocked: no
				Hard blocked: no
			boban@titan:~$
			When i turn off switch after login:
			Both LED's go off.
			boban@titan:~$ rfkill list
			1: dell-wifi: Wireless LAN
				Soft blocked: yes
				Hard blocked: yes
			2: dell-bluetooth: Bluetooth
				Soft blocked: yes
				Hard blocked: yes
			boban@titan:~$
			When i turn on switch again:
			boban@titan:~$ rfkill list
			1: dell-wifi: Wireless LAN
				Soft blocked: no
				Hard blocked: no
			2: dell-bluetooth: Bluetooth
				Soft blocked: no
				Hard blocked: no
			3: hci0: Bluetooth
				Soft blocked: no
				Hard blocked: no
			boban@titan:~$
			Both LED's go ON.
			Net manager starts connecting to wifi.

Conclusion: Normal behavior is when i set in bios bt & wifi, if i set bt only it doesnt work the way it should (i use sudo rfkill unblock all to make it work).