Yesterday, DailyTechRag sat down with Palm’s director of wireless solutions, Joe Fabris to discuss industry trends, Palm’s relationship with Microsoft and the general direction that the company is heading in. Contrary to Microsoft’s vision for the convergence of mobile devices, which was articulated by CEO Steve Ballmer during yesterday’s keynote, Fabris described a future in which Palm will produce two very different products for two very different markets. On the enterprise side of things will be Windows Mobile smartphones like the Treo 750; for the consumer market, Palm will continue to produce Palm OS-based devices like the $100 Centro. Overall, Fabris stressed the points that Palm CEO Ed Colligan has been making lately: Palm is a company looking to stick to its core strengths rather than trying to be everything to everyone.

At one point in our conversation, we got to talking about Palm’s different Linux OS initiatives–the in-house variant and the ACCESS developed next-gen OS–and of course, that famous albatross came up: the Foleo. Sure, we’ve known for a while that a number of Foleo units have been floating around in Sunnyvale. Still, we never expected Fabris to bust one out of his bag and let us get a little hands-on action. Unfortunately, we didn’t have our camera on us at the time but judging from the PR person’s facial expression, they probably wouldn’t have let us snap a photo of the canceled device anyway.

So, what’s the Foleo like? The form factor is very small–it’s much closer to a UMPC-type device like the Eee PC than it is to a real laptop. Still, the sucker has got some serious heft to it–it’s not necessarily heavy but it feels solid, as in I wouldn’t be too afraid of breaking it. The screen is fairly small and has some strange dimensions; it’s fairly wide for its size but not very tall. The keyboard was a nice size though and the pointer device was pretty stiff, if you’re a fan of that sort of thing. As for the Linux-based OS, I didn’t get very much time to play around with it but it seemed pretty responsive and fairly intuitively laid out, if a little limited.

During our conversation, Fabris was quick to point out that Ballmer had described a very Foleo-like device during his keynote that morning–a keyboard and screen that users in developing nations could plug their smartphones into that would take the place of a full-on PC. Fabris seemed pretty confident that that would be an application where the Foleo could shine–at a $500 price point, however, devices like the Eee PC and the OLPC XO would probably be far more attractive. As Colligan has hinted, Palm might still release a Foleo II in the future (Fabris confirmed that it’s still a possibility) and at a lower price point, it might be a competitive device in certain markets. Until then, the only place you’re going to see a Foleo is in a Palm exec’s bag.