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What's the difference between a laptop and a personal digital assistant? If the PDA is based on the Palm operating system--designed for keeping schedule, address book, and other personal information handy--the difference is huge. But increasingly, handhelds running Microsoft's Windows CE blur the line between laptop and personal information manager.

Windows CE palmtops have not been a howling success--International Data Corporation analysts say Palm OS­based devices command more than three-quarters of the PDA market. So Microsoft has a new name for the latest batch: Pocket PCs. They boast the sleekest hardware to date, and the new CE 3 operating system offers such praiseworthy advances as visible menu bars and improved security options. Also new is the reader software for perusing electronic books. Future CE 3 devices will support GPS, the Bluetooth wireless standard, and wireless services through MSN Mobile.

We checked out one of the first Pocket PCs, a preproduction Hewlett-Packard Jornada 545--the initial entry in HP's 540 series. Priced from $499 (with 16MB of RAM) to $599 (with 32MB of RAM), the 540-series Jornadas carry such extras as PeaceMaker software to permit infrared business-card exchanges with Palm devices. The Jornada 545 is the smallest color Windows CE device to date, and its display rendered crisp, clear text in Reader. Otherwise, the 540 series doesn't differ much from its predecessor, the 430se.

If you would like to read books, browse the Web, or run a spreadsheet on a device you can fit into a pocket or purse, the latest Windows CE palmtops are more appealing than ever. But how many people are willing to sacrifice the simplicity of the Palm for the fripperies of Windows CE? Judging from Palm's market share and recent decisions by both Everex and Philips to stop making Windows CE palmtops, the answer is, not many.

SUMMARY

HP Jornada 540 series Street price: $499 (with 16MB of RAM) to $599 (with 32MB of RAM) Hewlett-Packard 800/443-1254 www.hp.com/jornada