Running a small business--which should I use?

I would like to keep a business client database. I don't know whether to use AppleWorks, iCal/Address Book, or Palm Desktop, which came with my Mac. I like iCal because of its reliable reminders for meetings and other business related events, but the address book does not have a mail merge feature, making it useless for generating mailings. (Too bad, because sometimes the calendar reminds you that you need to send a letter to somebody, and it would be nice to be able to do it with a touch of a button right from your calendar program.) AppleWorks has a database with mail merge, but it has no calendar function. Palm Desktop has both the calendar and contact list with mail merge capabilities, but I don't know what the future of it is. I wish the various software programs "talked to" each other better in this day and age. What would you guys suggest I use?

Tim,
If you're worried about 'the future of' Palm Desktop, then AppleWorks is probably not your best choice. AppleWorks has reached the end of its development cycle, and indications are that there will be no further updates to it. While it will work with the new crop of MacIntel machines, using Rosetta, that's about as far into the future as there's any guarantee.
That said, AppleWorks does, as you've noted, offer the possibility of using mail merge (for printed mailings), which could be the deciding factor.
If you want to send email, rather than printed mail, then depending on the extent of your mailing list, and the degree of personalization you want, a combination of Address Book and Mail might serve your purposes.
Your set of 'standard letters' could be kept as a set of Draft messages with subject lines, but with no listed recipient. To send a letter, open, then Copy the draft. Close the draft, open a New message, and paste the draft contents into the body of the new message. Add a subject line, then address the message and send it.
If you're sending to more than one person, you can set up a group in Mail. Create a new folder, then drag the names you want into this folder. To address a message to everyone in the group, click in one of the address fields in the message, then type in the first few letters of the group name. Double click the name of the group in the list that appears (or press return or tab if the correct name is the only one listed, or the one that is highlighted) to populate the address field with all the addresses in the group.
To avoid address creep, I place my own address in the To; field, and the rest of the addresses in the BCc field. Each recipient then gets a message with only one address visible (mine).
"What?" you say, "No recommendation regarding Palm Desktop?"
Only because I haven't used it. When Claris Organizer (which became palm Desktop) first appeared, a desk planner (eg.Day-Timer) served my purposes well, and was much more portable than the desktop computers I used at home and at work, with only sneakernet to connect them. Now that I'm retired, have a much more complicated schedule, and use an iBook with wireless networking, I'm finding more use for an electronic calendar, and have started to use iCal. I haven't compared the features of the two, so I'm in no position to recommend either over the other.
Regards,
Barry

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