SMARTPHONES PROMISE ALL of the capabilities of the Internet in the palm of your hand. For small-business owners, that means the potential to manage their daily interactions with clients and move merchandise from wherever they're located.

But which smartphone is the best?

Both Apple (AAPL) and Research in Motion (RIMM), the creator of the BlackBerry, want you to think that they have the answer — and they're making some big plays aimed at small-business owners. The pitch: That the capabilities of each of their devices — whether it's the iPhone 3G or the BlackBerry Curve — can be expanded exponentially through so-called "apps," downloadable applications that have been reconfigured to work with mobile devices. Apps allow business owners to process a credit-card transaction, track a package or create an invoice from their phone.

Apple, which launched its app store 10 months ago and recently celebrated its billionth app download, launched an advertising blitz last month that claims its iPhone has an "app for everything" that a business person could want. BlackBerry has been a little slower to embrace app-mania. It just launched its BlackBerry App World a month ago.

Elizabeth Robinson, president of Volume Public Relations in Centennial, Colo., was a faithful BlackBerry Pearl user for a year and a half, but after seeing the wide range of business apps on the iPhone she decided to make the switch. (With more than 1,000 available apps on BlackBerry App World, Research in Motion currently falls considerably shy of the iPhone's 35,000 apps — 1,840 of which are geared toward business customers.) The AP Mobile News Network app delivers news faster — and gives Robinson a leg up on the competition, she says. And Apple's Keynote Remote application lets her view presentation notes and slides. “Why lug around an expensive laptop for a presentation when you can do it from your iPhone?” she says.

Beyond the number of applications, however, small-business owners need to consider the device's ability to handle business needs, says Rob Enderle, principal analyst at the Enderle Group, a San Jose, Calif.-based technology research firm. "Apple’s iPhone is still mostly a consumer-based product and isn't approved by many corporations," he says.

To cut through the hype and the disparity in app selection, SmartMoney decided to find out which apps work best for small businesses — and on what devices. We canvassed the app stores for the most intriguing small-business-oriented downloads, talked to device owners about how they are using their smartphones and talked to tech experts.