The T|E has a better screen (the T|T has a screen where it's possible to get dust under the screen), the T|E has more memory (32MB vs. 16MB), and the latest OS (Palm OS 5.2.1 vs. Palm OS 5.0). But, the T|T has Bluetooth and the Palm Universal connector.
I would go w/ the T|E, that is, if you don't need bluetooth.
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I agree with the above poster - if you don't need bluetooth, go for the T|E - it's one heckuva machine at it's price point. If I could go back to a machine without the collapsable graffiti area, I'd pick the T|E hands down since BT isn't that important to me.