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When u go talk to a palm os user u will always hear them tout its simplicity and yet most of them crave a high resolution color screen, more cpu power and memory, built in multimedia function, full browsing and many other features that palm os lacks. >>
Then you're not talking to the "right" people.

No, seriously, the people I talk to actually use these for work and what they want is something inexpensive that will take notes, send and receive email, manage their contact database, and manage the scheduling etc. Some want stuff like billing and specific-field oriented apps. Plus they want things like AvantGo, etc.
That's about it, and they don't want to pay $500 to get it.
On the other hand, my computer geek friends often want MP3, MPEG playback, etc. Fortunately for Palm, the former group is the MUCH bigger group.
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It would be a very easy to create a strip down windows ce that only does what the palm os can do and that would be just as simple as the palm os, but then all the processing power and memory would be wasted. >>
Easy huh? Heheh, Microsoft was trying for years. Finally they've come up with PocketPC, which is better than previous versions, but is still big by Palm OS standards.
I agree, PocketPC IS feature rich, but most people I know don't want to pay for that stuff, especially if they already own a laptop (like most of the business users I know).