"Latest changes are kept" is the option I use for resolving conflicts if both records, on Palm Desktop and on device are modified.

It looks to me that dismissing an alarm on device is considered as a change.

I say that because of the following example:

1) This morning I edit an event on Palm Desktop (whose alarm has still to go off) to move it to ( let's say) tomorrow.

2) I don't have time to sync, I'll do it this evening.

3) Before syncing, the event alarm on device goes off and I dismiss it.
(remember that on the device there is still the old timetable for that event)

4) After sync, the event that I moved to tomorrow, disappeared and old version (with dismissed alarm) is kept.

There's a risk of missing an appointment.

Or I make something wrong, or alarm dismissing should NOT be considered to resolve conflicts.