You can purchase software that lets you put your own applications and data in the unused portion. You can also easily update the OS of units with Flash. All Palm OS devices since the Palm III have Flash memory except Visors. Palm VIIs have Flash memory but the OS uses the entire 2MB so you cannot add your own files to Flash. Expandability Handspring Visors and TRGPros both have expansion slots.
CF offers less variety but provides a very cheap way to add almost unlimited memory to the Palm.
If you are a heavy reader or use large databases, the TRGPro is probably the unit for you for this reason. There are two main form factors for Palm units. The Palm III series units, the Visors and the TRGPro are all approximately the same size. The Palm V and Vx are significantly smaller and thinner units that will easily fit into a shirt pocket. The Palm III, Palm IIIx, Palm IIIxe, Palm IIIe, Palm VII, TRGPro, and Visor units all use 2 AAA batteries.