Sorry about the delay. Like I said, upgrading to 4.1 isn't fun and I've been doing one, sometimes two per week so haven't been on the boards for a while.
Yes, WS4's run Win CE off a compact flash card. Micros had an option of running Eclipse and Ultra workstations without a hard drive built into the older versions of 3700, very much like thin clients. I never liked it. It was slow and didn't have any offline capabilities.
I haven't looked at the 2010 too much, but wish that I had. It's not something that I'd want to use as a regular workstation, but would be great as a backup server.
Also, if you're going to use WS4's, make sure Micros give you the new LX model. They're faster and run a new version of CE.