There aren't any limitations of the applications themselves; the marketing angle is on which subset of the "ultimate" package that you're getting.
http://office.microsoft.com/en-us/products/FX101635841033.aspx
> For one thing, it does not seem to include Outlook, which I
> need to synchronize with my PDA.
Outlook 2007 by itself is $79 at Amazon.
But wait: you're saying that there's no Free Software to synchronize your PDA?
Huh.
> Not to mention the fact that I have to re-learn Excel because the
> 2007 has a very different user interface than the 2003.
I think you're exagerating. I'm a pretty heavy user of Excel, and I barely noticed the difference between 2003 and 2007. I did notice that it's a lot faster, though.
/jordan