Dim,
There are 4 lights inside the Host XR3:
1: the blue light: this is how you see activity. If you plug the Host XR3 into a PC and the PC recognized it and load the drivers, as all Windows machines do, then the blue LED starts blinking, 2-3 times per second.
The blue light is in fact showing the RF receiver electronic power. Whenever the blue is on, the receiver is listening.
2: next to it is a GREEN led. This is the transmitter. You see an active connection when the blue is very rapidly blinking and you see the green light coming on, not as often, when the Host XR3 is transmitting.
3: Then there is the RED led. This is mainly showing power. When not initialized (no USB, but power) the red will be off. If the device is initialized through USB but you don't have a driver, or you modified the driver on Windows, then it will stay red, but no blue.
Back to your questions:
With "simmering blue" you hopefully mean a very fast blinking. This shows there is a connection or you are searching for devices.
With "sometimes yellow" you probably mean "green" and it means that the Host XR3 is transmitting.
You have a mouse or keyboard with Bluetooth, seems like it.
With all that you have a working Bluetooth system.
What you don't know is how to use Windows to make a SPP (serial) connection.
Please consult your Windows documentation how to use the Bluetooth in Windows for a step
by step instructions. I'm sure you also find lots of information from the online resources
from Microsoft to tell you how to use that.
It is the SAME for all Bluetooth hardware and has nothing special to do with the AIRcable Host XR3.