Celio Corporation hopes to avoid the Palm Foleo’s fate with its new smart phone companion, which was designed to give Windows Mobile devices a larger screen and keyboard for surfing the Web, viewing and editing Office documents, and more. Unlike the Foleo, the 1.9-pound REDFLY doesn’t have its own processor or operating system; it syncs over USB or Bluetooth 2.0 with your smart phone and extends Windows Mobile to an 8-inch display. This device looks like it has potential, but the high price may give some pause.

Business users will like the built-in VGA port for putting on presentations with PowerPoint Mobile, as well as the up to 8 hours of battery life. You can even plug in USB drives to access files on the go. This clamshell should be available sometime in the first quarter for $499. The company told us that it was targeting enterprise users first, especially those who use sales force automation applications, but that it expects at least some cross-over with early adopters.

Now that you can get a full-fledged computer like the Eee PC for $399, the REDFLY might not fly with consumers, but we think it could make some waves in the business market if the synchronization works as promised. Stay tuned for a full interview with Celio later this week.