PALM OS 3.0
When Palm released the Palm III in 1998, they thoughtfully included version 3.0 of the operating system in flash memory for future upgrade potential. As covered in @Teal #2, flash memory is a memory technology which stores data securely like traditional ROM (Read Only Memory) chips, but can also be periodically rewritten when necessary. Previous handheld models, including the Pilot 1000, Pilot 5000, and PalmPilot Personal and Professional only included the OS in non-upgradeable ROM. While these older devices can still be upgraded today by replacing their internal memory cards (see "obtaining the upgrade" below), only flash memory allows full software-based upgradeability at little or no cost.

PalmOS 3.0 represented a major milestone for Palm, providing a solid and stable platform for applications, taking full advantage of what was then a state-of-the-art 16Mhz Dragonball processor, 4-shade grayscale display, and new infrared beaming capabilities. The Palm III also represented a major commercial breakthrough for Palm, gaining widespread acceptance for the first time. As such, virtually all applications run under OS 3.0, and many require this version or higher.

PALM OS 3.1
A slight upgrade to PalmOS 3.0, OS 3.1 premiered the following year on the Palm V, Palm IIIx , and Palm IIIe handhelds. Supporting the new Dragonball EZ processing chip found in these models, OS 3.1 contained other minor changes, mostly affecting the font and text handling functions to bring them up to Windows-defined standards. OS 3.1 is still alive and well today, burned into ROMs on new Handspring Visor and Visor Deluxe handhelds.

PALM OS 3.2
Later that same year, Palm debuted its first entry in the un-tethered world of wireless connectivity, the Palm VII. Included with the Palm VII was Palm OS 3.2, which added code for wireless networking and support for Japanese and other languages. OS 3.2 also added an improved serial interface library, allowing communications programs and other apps to easily use the IR port and add-on peripherals as additional serial devices. Older versions of the OS only supported the single serial port at the bottom of the handheld. The new addition allows apps to communicate with multiple serial devices simultaneously, and adds standardized access to add-on modems, GPS devices, and digital cell phones. Interestingly, OS 3.2 was only released on the Palm VII, with its additions incorporated later as part of OS 3.3.