(FORTUNE Magazine) – Oh, what a dilemma it's been: On the one hand, Palm's most popular personal organizers are thin and stylish but lack both an expansion slot and a color screen. On the other hand, Handspring's Visor organizers have versatile Springboard expansion slots, but are anything but sleek and stylish. Now, in a nice bit of sleight of hand--presto!--the dilemma has disappeared. Handspring has just introduced a svelte, attractive model called the Visor Edge, and Palm has countered with a pair of models--one monochromatic, one with a color screen--that for the first time include expansion slots.

I've been testing both the Visor Edge and the Palm m505 color-screen handhelds, and they are impressive little computers, the best that either company has made to date. While the PC industry has been moribund lately, the handheld category has been lively. These small computers are even being sold at Wal-Marts and other mass merchants, signaling that they are no longer just for geeks and have entered the mainstream. The only downside has been that until now, consumers have had to choose between left-brain expandability (Handspring) and right-brain style (Palm). These new models represent the best of both worlds.

From a technical standpoint, Palm's m505 gets a high-five. When it goes on sale here in May, the m505 will cost $449, just $50 more than the Visor Edge. The most impressive thing about the m505, though, is that despite its color screen it is actually smaller than the monochrome Edge--the same width, almost the same thickness and weight, yet shorter by half a centimeter.

Both the Edge and the m505 use the Palm operating system (but different versions), which means they can take advantage of literally thousands of software applications written for the Palm OS. Each keeps track of personal information with calendars, task lists, notes, and contact files. They both synchronize easily with popular personal information management software for Windows and Macintosh computers. Both have rechargeable batteries good for two to four weeks between charges.

And now each of these devices has the ability, through expansion slots, to morph into all sorts of digital tools, including telephones, digital cameras, MP3 players, wireless modems, and even Global Positioning System receivers. There are some interesting differences, however.

When it comes to expandability, the Visors win hands down--for now. Palm simply has too few expansion modules today to match the Springboard arsenal. That will change by the end of the year, however. Unlike Handspring's proprietary Springboard slot, Palm's expansion slot is based on the open SD (Secure Digital) and MultiMedia Card (MMC) standards, which use thin cards about the size of a postage stamp. Dozens of companies, including Toshiba and Panasonic, support the SD standard.

In the meantime, the Edge has a new expansion slot too. In order to come up with a thin challenger to Palm's sleek and popular Palm V, Handspring had to displace the Visor's proprietary Springboard expansion slot onto an external, detachable gizmo that plugs in to an even smaller connection port on the edge of the Edge. Springboard modules plug in to it, piggyback style. It is not an adroit solution. Adding the external Springboard attachment makes the Edge fat again. Handspring's argument is that the piggyback solution makes the Edge more versatile; when no expansion is needed, the Edge is sleek. Obviously, a better solution--for users, at least--is for developers to create new modules that fit into the new, smaller Edge connector. But given how long it has taken developers to create useful Springboard modules, they are probably shaking their fists at Handspring for introducing yet another engineering challenge.

The m500-series Palms mark the debut of yet another expansion option, a speedy USB-based "universal connector" where the old serial connector used to be, on the bottom of the device. All future Palms will use the universal connector for PC docking cradles, portable keyboards, and other bottom-feeding devices. Bummer: This means that older peripherals won't work on new Palms without an adapter, if at all.

Both the Edge and the m505 come standard with 8 MB of memory, which can be boosted via expansion cards.

The display screens of Palm OS-based handheld computers are notoriously small, dim, and indistinct. The Edge's screen, which displays 16 shades of gray, is modestly better than those of earlier models. The m505 has a reflective, 16-bit color screen that displays 65,000 colors, and a backlight that makes it tolerable. The screen size for both models is 160 by 160 pixels.

Handspring is proud of a new "fast look-up" feature, which lets people sort through contact files without using the stylus. For large databases of names, however, the feature is of marginal value.

Both the Palm and the Edge have flashing-light alarms, in addition to beeping alarms, allowing users to be notified of upcoming appointments without disturbing neighbors in meetings, theaters, or other places where beeps are for creeps. The m505 also has a vibrating alarm.

Silent alarm and fast look-up are new features of Handspring's version of the Palm 3.5 2H2 operating system. The new Palm, meanwhile, uses Palm 4.0, and it has some new tricks up its sleeve too, like a notepad that captures drawings and scribbles.

Handspring has always been much friendlier to the Macintosh; Palm used to punish Mac users by making them pay extra for special connection cradles and software. Good news: The new Palms come with full Mac support. The brushed silver Edge, however, is a perfect style match for the new Titanium PowerBook.

Which one is best? It's a toss-up. If you need expansion capabilities right away, the Edge has the edge. If you want a color screen for games and digital photos, the m505 is the way to go. Either way, you've got to hand it to both companies for putting so many good things in such small packages.

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