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With the launch of the Pocket PC 18 months ago, Microsoft finally produced a credible--and increasingly successful--challenger to the Palm operating system, which still dominates the personal digital assistant universe. So in its first revision of the Pocket PC OS, Pocket PC 2002 (originally code-named Merlin), Microsoft was not about to overhaul something that was working just fine. Judging from our tests with a shipping HP Jornada 565--one of the first PDAs to use the upgrade--Microsoft is correct in touting its new Pocket PC 2002 as more evolutionary than revolutionary.

Also shipping this fall on models from Casio, Compaq, Symbol, and Toshiba, Pocket PC 2002 introduces a slew of tweaks intended to address user complaints, increase the devices' usefulness for mobile communications, and make them more attractive to corporate buyers.

On the user front, for example, Pocket PC 2002 adds two text-input options to the old software keyboard and letter recognizer: Block Recognizer accepts one-stroke characters akin to Palm's Graffiti; Transcriber--previously a downloadable add-on--recognizes cursive script (but doesn't get everything right and is difficult to correct). The opening Today screen--an at-a-glance view of your datebook, to-dos, and in-box--can be personalized with skins or photos.

Business users with lots of contacts will appreciate having the ability to view them by company as well as by last name, something a Palm does not offer. New on-screen datebook buttons make switching views--from daily to weekly, monthly, annually, or by text entry--quick and easy.

Some of Pocket PC 2002's most impressive features relate to e-mail. It's easier to set up a POP3 or IMAP4 account; and the PDA, when cradled, can automatically retrieve messages from several accounts via a desktop PC's Net connection. Similarly, Pocket PC 2002 supports desktop pass-through Web browsing and instant messaging via MSN Messenger. Pocket Internet Explorer now recognizes HTML, CHTML, and WAP content.

If you use Outlook 2002 (a free copy comes with the Pocket PC 2002 desktop software), you can mirror your subfolders on your PDA--a useful trick for people who receive and sort lots of e-mail. In addition, Pocket Outlook contains a spelling checker, as does Pocket Word.

Enterprise Friendly

Corporate IT types will appreciate innovations such as support for strong passwords and virtual private networks, and a built-in Windows Terminal Services client for remote access to a Windows 2000 server. These features aren't accessible via the cradle, however; in order to use them, you'll need to establish direct network access via an add-on module.

All Pocket PC 2002 devices must store the OS in Flash ROM so that it can be upgraded as required. Unfortunately, among Pocket PCs sold up until now, only the Compaq IPaq keeps the OS in Flash ROM (and hence can be upgraded to Pocket PC 2002).

The Jornada 565 packages the new OS in the sleekest, lightest (6.1 ounces) Pocket PC to date, with 32MB of RAM and 32MB of ROM (in which the OS and several HP apps are stored). The brilliant, 16-bit color TFT screen is on a par with the best we've seen. But you pay for these goodies: $599 for the 565, and $649 for the Jornada 568 (which carries 64MB of RAM).

Analyst Stacey Wu of Mobile Insights says a Pocket PC 2002 will be particularly useful--and better than the Palm competition--for the truly mobile professional who can afford to pay $600 or more (especially if wireless local- or wide-area network access is involved) to stay well connected on a device that possesses a magnificent display.

But if you have already invested in a Pocket PC in the past year or so, don't worry: Pocket PC 2002 shouldn't prompt major upgrade envy.

SUMMARY

Hewlett-Packard Jornada 565 Street: $599

SUMMARY

Microsoft Pocket PC 2002