Palm is on shaky ground right now. Though HP has agreed to acquire the company, its webOS has yet to find its footing with consumers. Palm needs to stick webOS into better smartphones and convince its carrier partners that the devices are worth selling.
Losing so key a figure in the webOS department is a definite blow to the company, though I suppose we could argue that Duarte's work is (mostly) done. The OS has been created, he's imparted his signature, and any changes moving forward will be evolutionary rather than revolutionary. Palm's problem is less its OS and more its hardware.
The bigger question is, what will Duarte do with Android?
Android is not the prettiest or most user friendly mobile operating system I've ever used, but it already does better than old and creaky competitors Windows Mobile, Symbian and BlackBerry OS. Google is much easier to master than its forebears.
The base level operating system of Android is a rather stark, and, well, robotic feeling. It isn't very warm. It could use some fluidity, better screen transitions, and more fun. I don't think it needs to be redesigned from the ground up, but stock Android could use a refresh at the very least. Items such as the settings menus and other deep-down controls/pages of the Android OS are plain ugly and interacting with them is not intuitive.
Perhaps Duarte could help with this. Google hasn't done more than confirm Duarte's new title, which is User Experience Director for Android. With Duarte on board, perhaps Android will gain some much-needed spit and polish.