Official announcement from the Palm Blog:
In the course of the past several months, it has become clear that the right path for Palm is to offer a single, consistent user experience around this new platform design and a single focus for our platform development efforts. To that end, and after careful deliberation, I have decided to cancel the Foleo mobile companion product in its current configuration and focus all of our energies on delivering our next generation platform and the first smartphones that will bring this platform to market.
Tough move by Palm, but there’s no point in going in to a platform battle with a platform you don’t plan to support to 110%. There’s also a few competitors like the Asus EEE PC that’s much more competitively priced.
This seems to be Ed Colligans decision (the CEO of Palm) and the Foleo was Jeff Hawkins (the co-founder of Palm) pet project. Guess there was some heated discussion behind the Palm walls before this decision was taken.