I finally broke down and bought a Pocket PC. I got the Dell Axim X30 (High). (Nice unit by the way although the back of it feels a little strange in your hand...)
I'm running ActiveSync 3.7.1 and also have a 512MB SD card in the slot of the Axim.
My question: Does anyone know how to have the file synchronization in ActiveSync synchronize files directly to the SD card instead of the built in memory?