The only stupid questions is the ones you dont ask, leading you to make a stupid mistake.
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1. What IS the internet experience like on a PPC? Is viewing web pages ok, or does a lot of reformatting have to take place to fit the pages on screen? You CAN view normal websites on a PPC can't you?
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You can view most websites fine on a pocketpc, but the experience is not as good as on a desktop. It depends very much on how the original website is formatted. If you give me the addresses of one or two websites you frequent I will do a screenshot of those sites displayed on the pocketpc.
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2. Does WiFi mean I can browse the net in Starbucks/airports etc. using a wireless connection for free? So what's Wlan?
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Yes, it does. Whether its free or not is up to the provider. Wlan (Wireless Local Area Network) uses WIFI to do its work. They mean more or less the same thing (pedantics aside)
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3. If I set up a wireless network on my PC at home (which has a broadband connection), could I connect to that and surf the net sitting with my PPC in the garden etc?
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Yes, but you will have an easier time setting things up if you buy a wireless router.
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4. If I buy one of those 3G data cards, would that fit into a PPC allowing me to use the net via a mobile network, or is that only for laptops?
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3G cards currently uses PCMIA cards, which don't fit into a pocketpc. You can however uses a bluetooth connection to a 3G mobile phone to do the same thing. Another alternative is the upcoming HTC universal PocketPC Phone, which will have 3G built in.
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5. What do they mean by ROM and RAM - I mean, when they quote '128MB ROM', do they actually mean 'read-only memory'? So that means that its 128MB ROM has stuff on it like OS, bundled software etc., and is therefore pointless quoting the ROM amount? Or can I use that '128MB ROM' for storage?
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ROM actually means EEPROM these days, basically the same stuff as in your thumb drive or camera memory card. RAM is the volatile stuff that you use on your computer and that gets erased when you switch it off, ROM on a pocketpc is equivalent to the hard drive on your PC, and remain even if you lose power. Its best to have as much as possible of both.
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6. I'm running a 5-year-old PC at home with WIN98. It has USB 1.0. Say a PPC model quotes USB 2 connectivity, can I connect that to my PC?
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USB 2 is backward compatible with USB 1.1, so don't worry. However, isn't it about time you update your desktop

You may end up with a PPC more powerful than your PC!
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7. I need a PPC mainly for web browsing, email and entertainment like games and the odd movie file. I'm looking at the Ipaq hx4700 but any recommended models?
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Thats a good device. All the latest pocketpc's can do the kind of stuff you want to do easily. Its only when you push the envelope that they differentiate themselves. Based on the age of your PC I can only suspect that you would do better with a nice big screen, in which case the HP hx4700 would be the best choice.
No problem. Fire away with more questions any time.
Surur