"Bluetooth Peripheral Device" -- MANY Problems

I struggling to install the new bluetooth mouse and keyboard on my system. I had purchased new Microsoft bluetooth mouse and keyboard in my system. But the drivers did not look to be working in Vista. When I had connected the bluetooth receiver they are detected as plug and play device. But somehow the driver installation failed. I had used the cd that came with keybaord/mouse. To test if anything is wrong with the same, I had installed the same on my XP laptop. And it worked. The keyboard and mouse sync well but the system fails to recognize the same.

That is a common compatibility error. You are not using the right drivers. For that there are two thing you can try. First use the official Microsoft website to install fresh Vista drivers and second try Windows Update. Manual setup allows you to search drivers through Windows Update. That is the best way to install hardware.