A hard reset clears the RAM and returns the PocketPC to factory conditions. This implies that after a hard reset you lose all the data that is on your device and the Pocket PC is just as it was when you first purchased it and turned it on. All programs installed, data entered, settings adjusted on the Pocket PC will be lost and only Windows Mobile and other applications that come with an original installed device (Pocket Word, Pocket Excel, Internet Explorer, etc.) will remain. This can become usefull if your system is severely bogged down and soft resets do not help any more.
Unfortunatly, there are no general guidelines for hard resetting your device: every device is different. You have to rely on your device manual in order to do this.
Be aware that older devices (this is BEFORE Windows Mobile 5) will automatically hard reset if the Mobile Device loses power.
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