What is a PocketPC ?
According to Microsoft, the Pocket PC (PPC) is "a handheld device that enables users to store and retrieve e-mail, contacts, appointments, tasks, play multimedia files, games, exchange text messages with MSN Messenger, browse the Web, and more."
PocketPC is like a miniture computer, it includes office suit , for example word & excel etc.
PocketPC was frist introduced in 2000-2001 , using the Operating System Pocket PC, which is based on Windows CE 3.0.  The newest opeating system which was released in 2005 is called Windows Mobile 5.0, which is based on Windows CE 5.0.
Who needs a PocketPC?
Any one who loves gadget should get one.  It's very powerful with its touch screen espeically when it can get online with current model which has wireless connection or even support 3G (phone connection).
List of things that a PocketPC can do:
check email
Store all your contacts details
Database
spreedsheet
Task organiser
word processing
jot notes
remote control other computers
internet
view powerpoint files
view pdf files
edit / view pictures
play movies
play music
use as a IR remote control for your TV, HI-FI etc
use it as a external drive
Read ebooks
Use it as a GPS
Dictionary
Calculator
Games
Alarm Clock
eWallet
messenger (ICQ, MSN, yahoo etc)
How to choose one?
1: Connectivity or Limited Connectivity?
All in one with phone function is always good, but it's a lot more expensive compare with buying a PPC and a low end Phone.  One of the first few PPC with WIFI connections are Toshiba's e740 and HP's IPAQ 5550.  They are still very good pocketpc. Most of the pocketpc after that has wifi or bluetooth connectivity, please check the specification before you get one.
2: Operating System?
I personally do not recommend anyone to get the original PocketPC OS, it's very bugging and unstable.  It slowly improves from pocketpc 2002, Windows mobile 2003, Windows Mobile 2003SE, Windows Mobile 5.  Anything with WM2003 or above are still supported by many software companies, but anything before that, it might be hard for you to find some useful software suits.  The most innovative feature in WM5 is that is uses Persistent storage, in previous version of OSs, when batteries (and backup batteries) drains, ALL THE DATA will be lost.  Most machines operating system are not upgradable, only a few of them can , for example HP IPAQ H4700.
Others specific funtions
For example model with integrated GPS, integrated Phone functions, or specific software bundle with it.