Windows CE isn't only for H/PCs and Palm PCs. It runs on a wide range of 32 bit processors, and can be made to work with pretty much whatever hardware you throw at it. The sort of devices that run Windows CE today include:

In-car navigation systems
Mobile phones
Industrial machines
Set-top boxes
Games machines

The actual Windows CE implementation of Win32 may only be a subset of it's Windows NT equivalent, it's still easier for a given company to find Win32 programmers for their devices than it is for them to find, say, Linux application developers.

And to address nutate's comments:

1. How can a Linux user possibly judge the quality of a whole new operating system based purely on it's user interface on the one product that you used? Isn't that like me installing Linux with some crappy window manager and claiming that Linux must be crap because it looks horrible?

2. You state that the full Windows applications are bloatware and yet the pocket versions are too small? You're arguing for both sides of the same argument!

Windows CE has a longer and more varied history than most people appreciate and is more prevalent that most people see. The versions, organized chronologically by their code names, thus far are:

    Consumer level offerings have been:
  • Pegasus - Windows CE 1.0. First Generation Handheld PCs (H/PC)
  • Mercury - Windows CE 2.0 for Second Generation H/PCs
  • Gryphon - Windows CE 2.01 for Palm-Size PCs (Ps/PC)
  • Apollo - Windows CE 2.01 for AutoPC
  • Jupiter - Windows CE 2.11 for Third Generation H/PCs
  • Wyvern - Windows CE 2.11 for Color Ps/PCs
  • Rapier - Windows CE 3.0 for Ps/PC (never widely used)
  • Galileo - Windows CE 3.0 (CE Pro) for Forth Generation H/PCs
  • Stinger - Window CE 3.0 for SmartPhones
  • Merlin - Windows CE 3.0 for PocketPC 2002

    Other, lesser known versions are:
  • Alder - Windows CE 1.0 for Embedded devices
  • Birch - Windows CE 2.x Embedded Devices
  • Hydra - Windows CE 2.1 for Windows Terminal Services
  • Talisker - Windows CE 2.11 for Embedded Devices
  • Orion - Windows CE 2.11 for Chinese-market P/PCs
  • Venus - Windows CE 2.2 for WebTV (seldom used)
  • Hermes - Windows CE 2.11 for Webphones (never released, absorbed into 'Stinger')
  • Cedar - Windows CE 3.0 for Embedded devices

Merlin is, as of this moment, the hottest CE software seen in a long time. There hasn't been this big of a buzz since Wyvern brought color.

CE, while perhaps a little wretched, isn't as bad as everyone says. It's not the best, but has features that the desktop counterpart could learn from. An example is that Windows CE has abandoned the Drive letter paradigm that has been with Microsoft since they bought QDOS; storage devices are now integrated into the file system a la Unix'es and other similar OSs. It also, by virtue of it's storage model, makes no hard distinction between storage memory and program memory. In effect, storage memory is little more than a temporary cache for data files.

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