HotSynch issues: can't change any settings in User Accounts, can't rename or delete, can't sync!

Question

Hello,  I am running Windows XP Pro Version 5.1.2600.  My wife and I both have Palm Treo 700p smartphones running Palm OS 5.2H. 
Her phone has been having continual issues with some third-party software.  Each time we would attempt to sync her phone after installation we would get the same error message:
HotSync Exchange synchronization failed
HotSync Error: Unknown error. (FE00)
We have tried to contact the software developer for the third-party application with no luck.  They simply insist that there is nothing wrong with their software. Mind you, the phone would always sync with no issues before we installed the third-party software, but that's neither here nor there.  Point being her phone would not sync no matter what I tried.
I searched the troubleshooting articles for HotSync issues and found that the only solution that might help would be to update our Palm Desktop from version 4.2 to  6.2.  After installing the new Palm Desktop I was able to sync my 700p.  However, when I attempted to sync my wife's 700p it still did not work.  When I tried to access the HotSync log on the desktop it would only show the log for my phone.  Her name would show up in the list of users, but once I tried to select it my name would appear in the window.  When I attempt to open the "User Accounts" window in the HotSync Manager the application freezes and I must shut it down.  I am unable to delete or rename the User accounts.  
Now we are stuck not being able to sync her phone and not being able to fix the issue.  She has a lot of files on her phone which she spent a lot of time working on, hundreds of hours, to get them where she needs them.  Our concern is that in the process of fixing the HotSync issue she'll lose her work.  We need a solution.  Any assistance you can offer would be greatly appreciated.
Thanks,
Sam
Post relates to: Treo 700p (Verizon)
Post relates to: Treo 700p (Verizon)

Answer 1

Versamail is a email application on the device. As for the backup folder you may have renamed it follow these steps (You may not need to hard reset the device. You can skip that part)
To fix this what we need to do is hard reset your device. The instructions to do that is here http://kb.palm.com/wps/portal/kb/common/article/887_en.html this tells you how to do all types of resets. Also, what we need to do is rename your backup folder. What this folder is, it hold all your programs from the last time you synced your PC. On your computer go here
Palm Desktop 4.2 and below
My Computer--> C drive --> Program files --> Palm/PalmOne--> your hotsync username
Palm Desktop 6.2.2
My Documents/Documents --> Palm OS Desktop --> your hotsync username
Right click on your backup folder and rename it to "backupOld". Resync your device to the same user name and you will get all your contacts, calendar, tasks, and memos.
You can install the programs again but make sure they are compatible with the device. Also try one program again and wait 24 hours to see if the same thing happens again. This way you know what program is causing the issue.