I basically feel that the segment addressed by both are different. I would be totally in favour of palm if the user is not too much of tech savy and wants a easy device to use. Palm m505 is very good in colour. Moreover the Palm devices are vey handy and light as compared to Pocket PC. Pocket PC is only for a power user and person who carries a Bag with him always because Pocket PC are not really for pockets. Enterprise user can look at Pocket PC as the option but for others I would still recommend a Palm because it is cheap, light and very easy to use. Alo you get lots of free application for palm inclusing maps for even Indian cities like chennai, banglore, mumbai etc.
Palm is also best for a guy who want to upgrade from a digital dairy and Pocket pc is best for a person who is comming down from a laptop.
If and only if you are a Power user and can shelve some money I would recommend a Pocket PC Else Better go with a Palm