I think it will work VERY VERY VERY well with the younger market.
ever since the release of the Iphone there has been a big demand for touch screen "advanced" phones in the age range of 16 - 25. Every time I go into an apple store theres always a small group of teenagers checking out iphones, or buying them.
Thanks to the iphone, teenagers are starting to go after
more "advanced" cellphones (compared to the typical youth phones of choice: Razor, and Sidekick)
The only thing keeping most people under 25 from buying a PPC phone with a nice data plan is the price.
with handhelds running from $288 - $600, plus adding a decent plan with unlimited data... we're talking mucho dinero ($$) for poor college students (or even highschool students for that matter)
So what palm is doing is quite amazing; They are hitting a now growing market with a phone in a "students price range". Yes it's features are cut down compared to most ppc's.... but as a phone used to play media, check emails (myspace), txt, schedule their hectic lives, and overall feel they are "up there" with iphone owners..... I'd say it'd not to bad of a phone.
Hell, I am still young myself (i'm 20)
I've been a Treo 700wx owner for about a year now (use it for clients),
I also have a HTC Mogul as my every other day phone. (couldn't do it with out Sero

)
A lot of my friends are intrigued by my phones (creepy); I am constantly passing out my Mogul for friends to check their email and such when we're out and about, and so far helped 4 people get set up on the sero plan with 700wx's.
I guess what I am trying to say is, I am noticing this growing interest for pocket pc phones in the youth, and feel the Centro would do very well in sales. (plus my wife and I think it's a damn sexy phone)
- Jeff