I don't think anyone has reported here on the signal strength of the IIIc but I think it will be very similar to the other Palms. Depending on your system and your use of the remote, the built in IR might be adequate. However, many have found the built in IR to not be strong enough. It also has a fairly narrow beam.
There are various ways to improve this situation. The OS 3.0 upgrade you mention has a much stonger IR signal. I used it with a Palm 5000 and I thought it worked quite well. The upgrade, however, only works on older Pilots. But an option would be to buy an old Palm Pro and the upgrade.
There are various IR extenders sold by Pacific Neo-Tek and others. I haven't used them but others seem to be satisfied with them. One disadvantage is that you need to hold the Palm upside down, i.e. pointing at you, for them to work.
I'd recommend the Visor with Pacific Neo-Tek's Springboard module. It has a strong IR signal with reasonably wide dispersion. This solution is much cheaper than the IIIc although you won't have a color screen.
Can the Palm do everything that the Pronto can? Not quite but almost. I have both a Pronto and a Visor with the OmniRemote module. I use both and often find the Visor to be more useful. The Pronto has support for bitmap buttons which OR doesn't. While I'd love OR to support that, in practice I don't find that I miss them on the Visor. There are also some differences in the capability of the macros and the programming of the hard keys. The Pronto is more capable than the current OR. For me, these differences are minor annoyances.
An advantage to using the Palm/Visor as your remote is that it can also contain other information such as your CD list for you CD changer, a TV guide, movie ratings, etc. See other postings on this subject.
If you want a pure remote and money is no object, then I think the Pronto wins. If you want a more complete device whose remote features are not very different from the Pronto's and which costs less, I'd suggest the Visor/OR module combination.
If you decide on a Palm or Visor and OmniRemote, I'd suggest that you also have a look at ORDesktop to help you lay out your screens. (Pardon the sales pitch;-)
Peter Sharpe
www.ordesktop.com