I found the solution here:
I actually didn't follow the long, highest rated answer. I just followed this suggestion from that page:
I use blueman, installed from Ubuntu software center. Right-clicking on the blueman icon*-> "local services" -> audio-> Check "advanced audio reception" is tipped. Btw I use it to listen in my Ubuntu 11.10 laptop what I play on my android phone.
In summary, I installed blueman and then enabled "Advanced audio recemption". the blueman icon didn't show up until after I ran it manually once. The change persists between reboots. Now my HTPC automatically boots to XBMC. Even with the TV off I am able to connect my phone to the PC and play music through my stereo.