tkim, if you knew this already then just ignore it but the one big positive about CF card devices versus Smartmedia devices is that they are not limited to a certain size card. Smartmedia devices are hardwired with a certain maximum size card they can use so if a new high density card comes out, an older Smartmedia device will not be able to handle it. CF on the other hand, has the controller built into the card, not the device, so theoretically, you can use any size CF card that comes out.
For my digital camera, I have a 128MB card and I have found that I am not limited by the card but by the battery in my camera. However, you are using your iPaq probably for MP3s, data and maybe pRon

so I would think 128MB is decent but in the future may not be enough. The one positive thing is if you get a CF card based camera later on, you will be able to use the card in that and buy a larger card for your iPaq.