Microsoft launches its latest challenge to Palm's Pilot handheld device Wednesday in the form of Pocket PC, a major upgrade to its Windows CE platform. The changes, which include improvements in processing power and a simplification of the interface, are a response to criticism that the old "Palm-sized PC" was too difficult to use -- but Microsoft still faces an uphill battle in trying to win over users of the vastly more popular Palm PDA. Today's launch will also introduce wireless capabilities for Pocket PC, using a Bluetooth-enabled card or an modem card that connects to a mobile phone. Bluetooth is a short-distance wireless networking technology. The selling point of WinCE has always been its power and versatility: unlike Palm, WinCE devices can play digital music files, surf the Internet and carry out other processor-intensive tasks. The devices were also in colour long before Palm introduced its own colour device. By contrast, Palm has continued to focus on its original strengths of including a few essential tasks, such as an address book and calendar, in a convenient and easy-to-use device. The software giant is now looking to radically simplify the interface to gain some of the attractions of the Palm, while retaining all the old capabilities and adding a few new ones. "Every single thing you can do on the device has been simplified and revised," said Didier Burdinat, Windows CE group product manager. He said the device aims to please both those who like Palm-style simplicity and power-users. "Some people will just want to manage their contacts and maintain a calendar, but we think they will soon ask for more." For example, Pocket PC comes with a built in Pocket Internet Explorer, which integrates the popular AvantGo Web-clipping service and includes SSE encryption support, which means you can log onto Amazon.com and buy a book over a secure connection. Palm-sized PC users could surf the Web, but had to download and install the software themselves. Other applications bundled with Pocket PC include:

• Pocket Word
  
• Pocket Excel
  
• Windows Media Player (which includes MP3 support)
  
• Microsoft Reader (for books in text or audio format), and
  
• a new version of Microsoft Streets, a mapping program.

The new email software includes IMAP4 support, allowing it to synchronise with a mail server. Two features that once cluttered up the interface are gone: cascading menus and the taskbar that listed each open window, Windows desktop-style. Instead, a drop-down menu at the upper-left corner of the screen lists open applications. Various changes make it possible to get around with fewer clicks, but the new interface still includes a Start menu and is still visibly more complicated than that of the Palm. Upgraded hardware means the new devices run several times faster than their predecessors. Pocket PC is also available with USB-based synchronisation, which runs at full USB speed. Palm's USB connection synchronises at serial-port speed. Launch partners include Hewlett-Packard, Casio, Compaq and Symbol Systems. The launch will take place Wednesday at 1800 GMT in New York City's Grand Central Station. It usually takes three tries for Microsoft to get something right. And that's enough reason for Palm to be nervous about the software giant's third entry in the handheld market. Go with Jesse Berst to read the news comment at AnchorDesk UK. What do you think? Tell the Mailroom. And read what others have said.