Thanks j800. I figured out what was wrong. Some packages have been updated, so I updated your steps:

Here's the process I followed:
*Install new libgps17
**Get http://packages.debian.org/sid/libgps17/armel/download
**mkdir tmp1
**dpkg --extract libgps17* tmp1
*Install new gpsd
**Get http://packages.debian.org/sid/gpsd/armel/download
**mkdir tmp2
**dpkg --extract gpsd_2* tmp2
*Copy new files into place
**cp tmp2/usr/sbin/gpsd /usr/sbin
**cp tmp1/usr/lib/* /usr/lib
*Tweak libs
**cd /usr/lib
**ln -s libdbus-1.so.2.0.0 libdbus-1.so.3

So then, as described in another post:

edit /etc/bluetooth/rfcomm.conf using your mac address and BT reciever's name:
power cycle to test the rfcomm's ability to bind on startup

at root prompt, "rfcomm" should report the receiver's data

in MM, open the settings dialog and choose the 'file path' option with "/dev/rfcomm0" as the path

then enable GPS.