The Palm OS is dated and anachronistic, and current Treo form factors are just clunky in comparison to other devices. Many analysts think Palm is circling the drain, and news that their much-derided uber-gadget — the ultra-portable smartphone companion/don’t call it a laptop known as Foleo — has been delayed over software quality issue doesn’t help. But hopefully, Palm can get it’s act together. Engadget posted an encouraging rumor that Palm may introduce a Linux-based smartphone in October of this year.

The Palm rumor du jour calls for Palm to deliver its first, Linux-based smartphone in an October release. According to the DigiTimes source, the new OS will be based on Wind River System’s flavor of Linux already in use (and buggy) in Palm’s forthcoming Foleo folly. That’s right, Wind River, not ALP. Really, we don’t care whose OS it is, just as long as we never have to see Garnet rolled out on a new device ever, ever again.

Assuming it’s true, this is good news. Palm was once an innovator, but the line of devices they offer has been stagnating for years. Palm can’t afford many more mistakes, though, so hopefully they’ll get it right this time. It’s a shame they can’t develop a smart phone OS on their own to compete with Windows, Symbian, RIM, etc., but using a 3rd party distro of Linux is certainly better than continuing on with an OS whose user interface hasn’t changed much in ten years.

I’m a Palm fan from way back — my first Palm PDA was bought in 1999 and I currently pack a Treo 650. I’m rooting for Palm, but I’ve kinda got that “dead man walking” feeling where the company is concerned.