This is such a good move for PalmSource, and for all PalmSource hardware makers!

The Linux Devices story goes into greater detail: Cobalt and Garnet ain't dead, but future PalmOS will be a layer of 'middleware' running on top of a core of Linux.

Linux is designed so that only the core OS is really Linux; the shell and user interface are add-ons, services which can be (and in this case, will) stripped out for performance and responsiveness. It isn't like Windows, where the UI and the shell are tightly wedded to the OS, with the attendant problems this causes for everyone who's ever seen the BSOD.

It also means the drop-dead-simple PalmOS user interface can easily be exported to non-PDA devices! Dang it, I've said to myself sooo many times I'd love to have a tablet or micronotebook running PalmOS, and now that's so much closer to being practical!

PalmSource press releases are linked here, and here's a good open letter from PalmSource with Q&A which explains the implications.

Having an OpenSource core OS means PalmSource won't have to reinvent the wheel, and it can concentrate on its fundamental strength of making PDAs and PDA phones usable through the middleware which will soon define what a PalmOS machine is, while the gazillions of Linux developers keep making faster, cheaper, better and more stable versions of the OS.

You won't see this any time soon, and it should not affect your plans to buy a PDA phone today, except that you now know the future of PalmOS is assured, and the resale value of PalmOS hardware will remain high.

Such a neat birthday present from PalmSource!

And, here's a more detailed explanation of why it's an even better deal than I thought, thanks to The Register. It's not just playing the China card (although the Middle Kingdom's enthuisiam for open source and Redmond's lack of success in market penetration there despite major investments makes it a natural for PalmSource):
Clickify the link above for more wholesome goodness.
On the other hand, here's Gizmodo's grumpy response; did they get overdozed on Lasix over there, or something?