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I assume primarily for future-proofing. The more free space on ROM, the more likely the device will be able to take an upgrade to the next OS, taking no other specs into consideration. Pocket PC 2000 ran nicely in 16MB ROM whereas Pocket PC 2002 required 32MB for all features.
Also, non-volatile RAM or whatever the technical term for the file store on an iPaq is (other vendors have different names for the same thing) works wonderfully for saving critical data/programs during a hard reset.
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Treo Pro!
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