The earliest computers had trouble with 10th-grade arithmetic, were supervised by the government, could barely fit in a bowling alley and made about as much noise. Now, computers do more than just math, no longer languish in government labs and can fit in the thumb hole of a bowling ball.

And judging by the excitement over the impending

Palm

(PALM)

IPO courtesy of

3Com

(COMS)

, investors think smaller might be better.

Xybernaut

(XYBR)

is a good example of this phenomenon. The company develops wearable computers. That's right. Think "Borg sweatshirt."

In pushing towards this goal, Xybernaut has collected patents and fostered relationships with energy companies that can power their devices. And as odd or unlikely as "wearable computers" may sound, investors have apparently warmed to the idea.

So far this year, Xybernaut is up 304.3%, finally reaching past 12, a level unseen since Xybernaut first hit markets in July 1996. Today, the shares rose 9 15/16, or 72%, to 23 3/4 on 18 million shares, the 10th most-active Nasdaq issue. The company's average volume is only 450,000.

News that Xybernaut received a patent for something called "transferable core" computer technology spurred today's interest in the company. Essentially, the transferable core technology allows users to remove the guts of an electronic device, carry around their data and then put it in something else, be it a phone or computer. Xybernaut also said the technology could run devices smaller than a palm computer.

John Moynahan, Xybernaut CFO and co-inventor of the transferable core technology, said the patented concept would allow users to get personal with personal computing.

"It's the truly personal computer," he said. "It's the thing you carry with you -- that's you. It makes everything from a personal computing standpoint yours."

Moynahan said that this new technology would take one to three years to get to market and would become more than just an addition to the company's wearable computing line.

"It's a part of it, but really it's separate," he said. "We think it'll end up being larger than the wearable computers. It's an adjunct to it."

Don't look for Xybernaut to begin manufacturing this on its own. The company has a "utility patent" on the core technology, which is different from a "design patent." Xybernaut owns the concept, which doesn't outline specific implementation details like interface and look. In order to bring this technology to market, the company will be involved in licensing the patented concept.

Moynahan wouldn't disclose any potential partners but did offer that some major names were interested.

"We've always partnered with strong players," he said coyly.

The company continued to rise in after-hour trading, gaining 1 1/8 to 24 1/4 on 1.2 million shares on

Island

.

Still, it's important to note that the interest in Xybernaut is kind of speculative. The company isn't covered by analysts and has yet to turn a profit. This doesn't concern Moynahan, though, who feels his company is not in a unique fiscal position compared to other technology plays. He added that Xybernaut was pushing for profitability as soon as possible.

"By that criteria, all dot-com stocks would be $2 a share," he said. "Our business model is such that by hooking up with strong partners, as we have in the past with

Sony

(SNE) - Get Report

Digital Products and

Rockwell

(ROK) - Get Report

, we can ramp up revenue without having to ramp up expenses at the same rate."

And speaking of 3Com, the company continued to have investors in the palm of its Palm on the eve before the handheld computer maker's IPO. It rose 3 15/16 to 108 on 226,000 shares. During the day, 3Com was the most actively traded Nasdaq issue, gaining 6 1/8, or 6.2%, to 104 1/8 on 58.8 million shares.

Just after 7 p.m., 3Com priced the 23 million-share Palm IPO at $38 a share, higher than the revised $30 to $32 range

announced on Monday. When the news hit late-night markets, 3Com was already up more than a point, before investors swept back into the stock and raised it even more.

Okie Nokie!

Gensym

(GNSM)

shot up 11 to 17 on 768,000 shares on Island after announcing an OEM agreement with

Nokia Networks

, a unit of

Nokia

(NOK) - Get Report

. Nokia will use Gensyms' software in some new products, one of which is called Nokia ServiceWatch.

ServiceWatch was unveiled a few months ago at Telemanagement World and enables service providers to check on data flow, using that information to route around problems and keeping networks running smoothly.

During the day, Gensym was a fairly pokey stock, inching up 1/16 to 6 on light volume. Its last day-session trade took place at 2:37 p.m. EST.

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.

.

MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD) Morgan Stanley Dean Witter Online, Mellon Bank's (MEL) Dreyfus Brokerage Services and clients of Salomon Smith Barney. It is also available to clients of Mydiscountbroker.com, CyBerCorp and Interactive Brokers. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.

Confused?

TheStreet.com

explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.