Ok, I reinstalled Palm Desktop and tried a new Hotsync. This time it worked although this is the newest log:
HotSync operation started 12/12/04 09:45:04
OK To Do List
OK Memo Pad
OK Date Book
-- Address Book
- Some handheld records were not copied to the Palm Desktop. Attempting to restore from the handheld.
Desktop = 1, Handheld = 3
OK Address Book with 1 message(s)
OK Expense
-- Backing up db Saved Preferences to file C:\Program Files\palmOne\Donna\Backup\Saved_Preferences.PRC
OK System
HotSync operation complete 12/12/04 09:45:15

Is this ok? Or do I need to fix anything else? lol