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Downsides? Yes, nothing is free. Flash is much slower than RAM. Reading and writing large amounts of data will take longer on a PS device than it did on a RAM device. That initial sync that pulls down 400 contacts and 5000 emails will take longer. Some write operations will seem a bit more sluggish
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The above quote is the reason why despite the gains in battery life, the new move towards persistant storage in the form of FLASH ROM does not excite me. I use Textmaker, PlanMaker, and ListPro (with several ~ 1 MB databases). Textmaker & PlanMaker take a relatively long time to load/run when stored in FLASH ROM (or even an SD card) than RAM. ListPro also takes longer to open, search, and store large databases when they are stored in ROM. Since I use these apps frequently (especially ListPro) these delays can add up to a significant amount of time lost during the day. If newer devices come with faster FLASH ROM than currently in use or utilize a very good caching algorithm that may offset some of this slowdown.
Personally the reason I moved to a 128 MB RAM PDA (Loox 720) was for speed. Battery life was a moot point because I could charge my PDA anywhere (including the car while I drove using a retractable cable and multipurpose pocket adapter). Loosing my RAM contents was also rendered less of a nuisance/catastrophe by using automated backup software and storing mission critical data files on an SD/CF or File Store. My guess is that those of us who still want maximal speed when using their PDA will simply choose to leave certain apps like Textmaker running all the time rather than closing them to avoid slow reloads. Also to prevent having to reload the app, the PDA will never fully be turned off (thereby effectively closing running apps) during the working day. Since the RAM will always be in use, this renders the battery life savings gained by full power off moot (at least for me). The other advantages to persistant memory storage outlined in the article however will still hold true. From my standpoint, WM5 memory model appears to be a mixed bag.
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Why is it none of the "official" will answer questions about the lifecycle of ROM memory once everything starts to be written to it?
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It's finite (probably like SD and CF on the order of a few thousand writes). This will be one of the reasons to upgrade a relatively old device to a newer model.

. My biggest fear is "loss" of the persistant storage. Some individuals reported their File Store simply disappeared and the system could not read from/write to it. The solution in some cases was to get a new PDA. If we start storing everything in one big file store, what's to say we won't end up loosing everything.