The Wall Street Journal and CNN Money are reporting a rumor that Palm and Handspring may be planning to merge. This has driven up Handspring's stock 25% today and Palm's is up 15%. Trading of the two stocks has been very heavy.

It is important to note that the WSJ is only reporting that there is speculation about a merger and that the article says there have been no talks between the two companies.

The rumors of Sony creating a color handheld similar to the T415 have proved to be correct. They announced in Japan today the PEG-600C. It is close in size to the T415 but the new model is .49 inches thick rather than .39. It is also .4 ounces heavier. Still, Sony crammed a lot into that small casing. It has a 320 by 320 pixel TFT screen that can display 16-bit color. It also has 16 MB of RAM and runs OS 4.1. It will be available in Japan on December 8 for 40,000 Yen, which is about $325. It is not yet known when a U.S. version will be available or at what price.

ArcSoft has announced PhotoBase for Palm OS. This application lets users manage and manipulate digital images on their handheld. Users can select the draw feature to title or draw directly on their images using the stylus. They can also do color correcting. Of course, it allows zooming and collecting images into slide shows. It will cost $30 and be available in a few weeks.

SplashData has released a free upgrade to SplashID, which securely maintains personal identification info on a Palm OS handheld and desktop computer. It includes both handheld and desktop software (for Windows and Macintosh) and the data is automatically synchronized between the two. SpashID 2.0 uses password protection and 256-bit Blowfish encryption. It costs $20. -PR

According to GameSpot, Global Star Software has created a Palm version of Serious Sam: The First Encounter. Players must fight their way through 15 levels filled with enemies. It will be available in early December for $20. -Ed

The Palm Online Store is now selling 2 new special edition m505 colors. The new units have the same specs as the metallic silver m505 but in 2 new casing colors. In a sign of the times, the colors are named Patriot Blue and American Cranberry.

The new models are available only at the Palm Store, for a unspecified limited time. They are priced at $399.

Update: Palm has changed the names of these models. They are now simply called Cranberry and Blue.

The head of Palm's operating system division, David Nagel, gave an interview this week in which he promised more innovation in future versions of the OS. As part of that, Be Inc.'s shareholders voted to sell to Palm just about all of its intellectual property, some of which will end up in future versions of the Palm OS. The company also released OS 4.1 for older models.

With Comdex going on, it was a wildly busy week with news coming at a fast and furious rate for a few days. WordSmith 2.1 was announced, and so was the HandCam, Quickoffice Conference, and the Mini Keyboard.

Whatever it was that investors wanted to hear, Handspring and Palm seem to have said it at Comdex. Handspring's stock price almost doubled this week. Palm's went up 30%, possibly on Handspring's coat-tails. Handspring co-founder Jeff Hawkins demonstrated the Treo wireless handheld at a Comdex keynote address and the audience responded very positively.

Handspring's stock price can only have been helped by the announcement that the Treo 180 and 180g will be out in January and the color version should be out three months later. This is earlier than expected.

Handspring has announced some specials aimed at perking up demand during this crucial holiday shopping season. First and foremost, they are offering the Visor Deluxe at just $130, a $40 savings. They are also offering various freebies with a handheld purchase. While purchasers get to choose from a selection of add-ons, which ones depend on which handheld they are buying.

myWorkbench 2.0 is an application for managing files on Palm OS handhelds with VFS expansion cards. Users can copy, move, and delete files from RAM and memory cards. myWorkbench can also launch applications and databases in RAM and on the card. Databases are sync'ed back to the card after the app is closed. It even runs in high resolution on Sony Cliés. It is available now for $15.

Palm Checkup is an application and service that can detect and solve problems with the Palm Desktop application. It can also alert users to new software updates and automatically install them. It works only with Palm-branded handhelds that are HotSycing with a Windows PC. This is a free service from Palm itself.

Recently, Palm introduced its first mid-range model since the IIIxe was discontinued. The m125 offers a grayscale screen, a good amount of memory, and an SD/MMC slot in a package the size and shape of the m100 series. News Editor Ed Hardy brings us this in-depth review.