If you don't plan to buy an extra battery for the iPAQ, this flaw won't affect you at all. If I hadn't told you about the problem, you'd have never discovered it was there.
There's a little switch that detects when the battery cover is opened and closed, and on some units it's broken. The only reason to open the battery cover is if you have an extra battery and want to swap it for the one in the iPAQ. Because of the iPAQ's excellent battery life, most customers don't even buy an extra battery, and most of those who do buy one almost never use it. It's still possible to change the battery even with a broken switch, but it becomes a 4-5 minute procedure to change the battery instead of a 40 second procedure. So, for most customers, a broken switch has no effect at all (except for lowering the price), and for most of the rest it's just a very rare inconvenience.
I thoroughly test all functions of the iPAQs before selling them--the only problems that have ever come up have been with that switch. Fixing it is expensive and takes time and skill, which is why I sell the unfixed ones at such a discount. In fact, as of early 2009, I'm selling my backlog of bad-latch iPAQs at an even steeper discount in deference to the crumbling world economy and the soaring yen; 50,000 yen is a lot more in pounds or Australian dollars than it was six months ago. Many of my sales come from word of mouth--one student or foreigner in Japan buys my system, then her friends get a chance to try it out and see how much better it is than the Canon Wordtanks and other electronic dictionaries they already own, and pretty soon I'm sending several more JLT systems off to the same school or neighborhood. Thus a big sales slowdown now could lead to many more lost sales even after the economy recovers--and thus the discount.
That's it for what you need to know--but if you're interested in the technical details, read on.
The main memory in the iPAQ is DRAM--the "D" is for "Dynamic," which means it needs constant power, even when the iPAQ is "off," to hold onto its contents. If there's no power to the DRAM, the OS and all installed programs and all data in the main memory are lost (everything on a memory card is safe, though). Fortunately, it's easy to restore the iPAQ to the exact state it was in when you first got it (or to the state it was in the last time you backed the system up).
It's actually not that easy to completely run down the battery. The iPAQ shuts itself down when there's only enough power left to maintain the DRAM for 3 days (you can change that time in the settings), and the main battery is powerful enough that you'll very rarely get to that point. Put the iPAQ down in the charger every night (hey, you've got to put it somewhere, and the charger is just as easy as sticking it in a drawer) and you won't have to worry about running out of power. In fact, if I'm just using the dictionary, I get about 3 days of normal use from a single battery charge. Although I haven't needed to do it , it is possible to carry a spare charged battery and replace a nearly-empty battery to get even more time away from the charger.
The iPAQ includes a tiny backup battery on the motherboard--this provides enough power to maintain the memory for a few minutes while you change the main battery. There's a tiny switch soldered to the motherboard that switches the DRAM power from the main to the backup battery when the battery cover is opened and back when it's closed. If it all works as it should, the backup battery keeps the DRAM safe while you change the main battery.
That little switch is the problem. It's impossible to replace, according to HP, so even on most of the refurbs, it's still broken. Thus, when you open the battery cover to replace the battery, it doesn't switch the DRAM to the backup battery and the contents of the DRAM are lost. However, even if your iPAQ has a broken latch switch, you can still change the battery without losing anything. It just takes a little longer. Before removing the nearly empty battery, use the built-in iPAQ Backup program to back your system up to the SD card or built-in iPAQ File Store. Now you can change the battery. After putting in the new battery, you'll have to spend about a minute resetting the OS, then you can use that same built-in iPAQ Backup program to restore the system from the SD card or iPAQ File Store. Your system will be exactly as it was before you changed the battery. Total time, 4-5 minutes.
Because the iPAQ's main battery is good for a full day even for heavy users, this isn't something you'll have to do often. 95% of my customers don't even have a second battery, so they never have to change the battery--even if they had the bad latch switches, they'd never encounter this problem. Of the 5% who do buy an extra battery, I'd estimate that most never have occasion to use it, and of those who do, most will use it only a couple of times a year (how often do you end up going to sleep in a room or apartment that doesn't have an electical outlet? the only use I can see is if you use the iPAQ as your GPS navigation device and go on a multiday hike into the wilderness).