Imagine your doing a hotsync. In the middle of the hotsync your handheld has a fatal error. You take the handheld off the cradle, turn it on, and discover that all your important data is gone. So, you open the Palm Desktop application. You get another error that says "Error reading Date Book file." You discover that the data in your Palm Desktop is also gone. Why, because the hotsync was not finished writing the files to your computer before the fatal error on the handheld.
Imagine you have a child. Your child is playing with your handheld and makes changes to your Address Book. Without knowing it, you hotsync the handheld. Now the changes that were made in the handheld are also in the Palm Desktop. Was your data backed up? NO! Hotsyncing is a way of sharing data between your handheld and your computer NOT a way of backing up your data.
Use Instant Backup and Restore to backup your important data after every hotsync. If you ever find yourself in one of the above situations, just hit the Restore button and all of your data will be restored to its original state.