We get this question alot, "When should I use Windows CE and Windows Mobile? How is Windows Mobile different from Windows CE". In our MEDC Tour, we never fail to get these questions. Mike being a guru for the Embedded technologies get this so often that he's written up something to clarify the difference between CE and Mobile.
While its true that Windows Mobile Pocket PC and Windows Mobile Smartphone are based on Windows CE as their core operating system the release of Windows CE and Windows Mobile don't happen at the same time - the "embedded" group in effect has two sets of customers, external customers that build cow milking machines, robots, industrial control systems, GPS navigation systems, sewing machines (a great example of a "multi-threaded" device) and a whole range of other cool and interesting devices (you can see some of the gadgets based on the .NET MicroFramework, Windows CE, Windows XP Embedded, and Windows Embedded for Point of Service on WindowsForDevices)
We also have a number of internal customers including Windows Mobile (Pocket PC and Smartphone), Windows Automotive [btw, did you know, that Windows Automotive is being used in a range of vehicles and after market devices including Honda, Acura, BMW, Mercedes, Volvo, Alpine, Kenwood and Pioneer!], and Microsoft TV.
here's the official FAQ that describes the difference between them http://www.microsoft.com/windows/embedded/plan_faq.mspx