I have bluetooth headphones connected to the watch and music playing locally from it. My phone is in the locker, though when I move around the gym the watch disconnects and reconnects if I get farther and closer. I don't mind this, as I'd like to be able to keep my phone in the locker and move closer to it every time I want to check for new texts and such. The problem is whenever this reconnect (of the watch to the phone) happens, the bluetooth headphones automatically disconnect from the watch and I have to repair the two. Not sure why this happens, the connection from the headphones to the watch should be independent of the connection from the watch to the phone (and no the headphones are not pairing to the phone, I checked - they are simply disconnecting from the watch). Hopefully an OS update (or even better, jailbreak) comes out soon.