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This month, it became public that Palm hired former Apple software architect Chuq Von Rospach to be its developer community manager.

On the whole, however, many of Apple’s best employees remain out of reach, for now, despite Jobs’ six-month leave of absence due to health reasons. Under Jobs’ latest reign, Apple hasn’t stumbled yet.

If the company starts faltering, Kawasaki has some advice. “Be nice to people on the way up, because you’re going to need them on the way down.”

Whether it’s Apple’s iPhone or Yahoo!’s home page, travel to the far corners of the world and the products created by Silicon Valley’s companies will win recognition wherever you go.

Database giant Oracle turns motivated employees into fire-eating sales warriors who go on to build sales organizations at companies large and small.

Sun Microsystems cranks out the Internet-savvy hardware and software engineers who have built much of the infrastructure for Web brands such as Google and Yahoo!

The biggest Valley brand, however, is Apple. To the world, Apple is known for its cutting edge devices and its larger-than-life founder and chief executive, Steve Jobs.

Inside the Valley, Apple is known for producing hard-nosed industrial designers, interface gurus and entrepreneurs who thrive on turning raw technology into a slick mass-market sensation–people a lot like Steve Perlman, who left Apple in 1990. Perlman, now chief executive of tech incubator Rearden LLC, developed much of the multimedia technology used in the color Macintosh.

“I can tell you I can’t look at a font on a screen or a piece of paper without going into a very critical mode,” Perlman says. “Too many engineers don’t think about how to turn the bundles of technology they create into a usable, intuitive gadget that they can take home and use. I’m just hypersensitive to it. It’s part of my DNA.”

And Apple apparently lives its “Think Different” slogan. “At some other companies it would be a black belt process with stop gates and check-ins and lots of measuring and concept validation testing with users,” says Jennifer Kilian, who managed a team that created Apple instructional products and is now creative director at Frog Design.

Not at Apple. In part, that’s thanks to an ineffable style that, in some ways, started with Jobs. When the team working on the Mac asked Jobs in 1983 for a standard they should shoot for, Jobs’ answer was simple: the Beatles. And not just the Beatles–the early Beatles. “That’s a big leap,” says design guru Clement Mok, who worked on the original Macintosh interface.

Two decades later, FanSnap Chief Executive Mike Janes–who ran Apple’s online store through 2003– remembers how Jobs would refer to certain situations as a “chain of pain.” Whether it involved reducing the number of steps needed to make a home movie or buy a computer from one of Apple’s stores, Jobs looked for ways to distill a process down to its essence.

As a result, if the technology industry has a soul, Apple’s employees are its keepers. And more than a few companies have tried to replicate a little of the Cupertino, Calif.-based company’s success by hiring Apple employees.

The result: Former Apple employees have taken the lead in efforts to take far-out new technologies to mass audiences. In part, that was thanks to the chaos that engulfed Apple during the early 1990s. While Apple fared well through the 1980s–even after Jobs departed in 1985–by the start of the Internet era, Apple was stumbling.

“It was like releasing a virus,” says Guy Kawasaki, chief executive of content aggregation site Alltop and Apple’s original Macintosh evangelist. “I don’t think the Macintosh division made many millionaires–none of us left fat, dumb and rich.”

Jobs’ return, in 1997, has stabilized things. The company morphed from a business that seeded the Valley with talent to one that attracted it. And many who have stuck around Apple for the past decade are now wealthy enough not to have to worry about ever working again. Apple’s shares have soared 903%, to $94.53, over the past decade.

There are exceptions, of course. The most notable: Jon Rubinstein. In 2006, Palm brought in Rubinstein, who had run Apple’s iPod business, to take over as executive chairman of the struggling smartphone maker. Since then, Rubinstein has attracted a steady stream of Apple employees.

In December 2007, Palm hired 16-year Apple veteran Mike Bell as senior vice president of product development. In March of 2008, Palm grabbed one of Apple’s flacks, Lynn Fox, who had led the company’s Mac public relations effort.

According to MacRumors.com, which has been a central focal point for the rumors, there are some items of possible evidence — as well as some doubts.

One of the hottest online rumors in the days leading up to January’s Macworld Conference & Expo contends that Apple is planning to release an iPhone nano.

Doubts on Photo, Form Factor

On the “dubious evidence” side, MacRumors also published a photo that looks like a product shot, with a regular-sized iPhone next to a version that is about 25 percent smaller. The site noted that it has doubts about the photo because of its source — it was submitted anonymously — and because of “the practicality of introducing a new form factor to the iPhone/iPod touch platform.”

Whether the rumors are true or not, some refreshing of the iPhone line is expected. The device, which had a brief period of being unlike anything else on the market, is now facing a variety of competitors, especially outside the United States.

A new report from industry research firm ChangeWave, for instance, showed that, while the iPhone is more than holding its own against Research In Motion’s recently released BlackBerry Storm, widely considered to be an iPhone challenger, there were clouds on the horizon.

One example: The report showed that 39 percent of the respondents to its survey planned to buy a BlackBerry in the next three months, an increase of nine percent from September. Thirty percent intended to buy an iPhone, which was down four percent from September.

Rumors from China

On the “possible evidence” side, MacRumors.com showed a screenshot from the Web site of an iPhone case manufacturer, XSKN. The screenshot shows a “Browse by Category” menu of phone model choices, which, under iPhone, includes “iPhone nano” as well as iPhone 3G and “iPhone 1st Gen.”

The credibility for this evidence, MacRumors noted, is that XSKN began selling cases earlier this year for the iPhone 3G, before it was released. In September, it showed case images of unreleased fourth-generation iPod nano designs, prior to that model’s release.

Although XSKN has not published images specifically identified as the iPhone nano, a company called iDealsChina has. Commentary on iDealsChina’s site noted that China is the place these rumors often start because the “thousands of people involved in building iPhone components” means information will get out. This information, the commentary noted, can mean “millions of dollars, if you get it right and you get it early,” for “accessory manufacturers and agents in China” who will then decide whether and when to produce accompanying items.

In a posting dated December 15, iDealsChina contended that a variety of companies are currently producing cases for the new iPhone nano. It quoted other sites as suggesting that the new iPhone would have a control dial with a pull-out keypad, but no 3G. iDealsChina also contended that the iPhone nano will be targeted at those who are looking for a lower price point, will be sold in such stores as Walmart, and will be launched at the Macworld show in January.

Jobs’ decision not to attend Macworld sparked a new round of fears that the CEO, a survivor of pancreatic cancer who has seemed gaunt in recent appearances, was in worsening health. To put the questions to rest, Jobs said Monday he is getting treatment for a hormone imbalance that caused him to lose weight, and urged Macworld attendees to relax and enjoy the show.

And after the Tuesday keynote, in which nothing purely new was disclosed, the company’s decision to substitute veteran salesman Schiller for master showman Jobs seemed even less questionable.

Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.

In Apple’s final appearance at the Macworld trade show, Apple’s top marketing executive, Philip Schiller, said Tuesday that iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously made all songs sell for 99 cents.

Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of “digital rights management,” or DRM, technology that limits people’s ability to copy songs or move them to multiple computers. Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library will be available that way.

While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection. Amazon.com Inc. started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.

Schiller also announced that iPhone 3G users will be able to buy songs from the iTunes store using the cellular data network. Previously, iPhone users could shop for tunes when connected to a Wi-Fi hot spot.

The iTunes changes marked the highlights of Schiller’s run as a stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple’s biggest product unveilings, such as the iPhone. Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.

Apple shares slipped $1.56, or 1.7 percent, to close at $93.02.

Schiller got a warm welcome from the attendees — who packed the convention hall despite the pall cast over the industry by the economic downturn — especially at the start of his talk, when he thanked them for showing up despite Jobs’ notable absence. He ran seamlessly through his 90-minute presentation, getting applause and oohs from the audience, varying little from the format of slides and demos established by Jobs. And like Jobs, he gushed about Apple’s products being the best in the world.

“Phil did an exceptionally good job in representing Apple,” said Tim Bajarin, president of technology analyst group Creative Strategies Inc.

Lower iTunes prices were Apple’s only nod to the recession — and an oblique one at that, as record labels have been asking for years to set varying song prices. Rather than an inexpensive new Mac to lure budget-conscious buyers, Schiller unveiled a new $2,800 Macbook Pro laptop with a 17-inch screen and the sleek aluminum casing the company debuted with the super-thin Macbook Air.

He also unwrapped new versions of two software packages for Macs, including the iLife multimedia programs. For instance, iPhoto ‘09 can recognize faces and sort photos based on who’s in them. GarageBand ‘09 includes videotaped, interactive music lessons given by Sting and other musicians. Apple added more professional video editing features to iMovie ‘09.

Apple’s answer to Microsoft Corp.’s Office productivity suite, called iWork, also got a makeover, including zippy new ways to add animation between slides in the Keynote presentation software. And Apple unveiled a “beta” test version of a Web site for sharing documents, iWork.com. Unlike Google Inc.’s online documents program, however, Apple’s version does not allow people to edit documents in a Web browser.

Apple said the thin new 17-inch aluminum-cased Macbook Pro, which joins an existing 15-inch model, will start shipping at the end of January. Perhaps the biggest twist is the laptop’s battery, which is designed to last longer on each charge — up to seven or eight hours — and work after more charges than older batteries. But like Apple’s iPod and the super-slim Macbook Air, the battery will be sealed inside and the owners won’t be able to remove and replace it themselves. Instead, they’ll have to spend $179 to have an Apple store expert swap in a new one