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No one really knows, and it's probably not worth discussing because it will never be used by anyone. PalmSource has announced a new Linux based OS to be released sometime next year, so I believe Cobalt should be forgotten at this point.
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Cobalt will not be used on any PalmOS handheld. It was developed but none of the licensees (Palm, GSPDA, LG, etc.) found it appealing enough to inlcude on their products. For that reason, PalmOS Garnet is still used.
What Alex refers to is the new OS and platform being developed by Access, who bought PalmSource. They have a new OS in development that is suppsed to be released to licensees by the end of the year, meaning new products would be released about midywar.
As for our 650s, chances are we will not see any OS updates. According to a friend who is pretty close to Palm, the 650 will not see any more majr firmware updates unless something major comes up either. So for now, all you have is Custom ROMs to play with after you have done any official updates. As a note: the BB Connect software will be seperate from firmware updates when it is finally released.