You may have heard about the failure of the T-Mobile USA Sidekick smartphone– known for its remote data storage and the fact that (gad!) Paris Hilton is a devotee – and how Microsoft’s $500 million 2008 Danger acquisition, which invented the thing, managed to lose what looked for a while there like everybody’s data permanently because Danger didn’t back anything up before it or Hitachi screwed up a SAN upgrade or maybe it was a server failure; there are various excuses floating around.

The situation cast another long shadow over clouds everywhere and has certainly done nothing to enhance Microsoft’s reputation, T-Mobile’s either. Google and Apple may count it a win.

When last heard from T-Mobile was hoping to get the widgets back on their feet.

Monday evening it said, “We have made significant progress this past weekend, restoring services to virtually every customer. Microsoft/Danger has teams of experts in place who are working around-the-clock to ensure this stability is maintained.

“Regarding those of you who have lost personal content, T-Mobile and Microsoft/Danger continue to do all we can to recover and return any lost information. Recent efforts indicate the prospects of recovering some lost content may now be possible. We will continue to keep you updated on this front; we know how important this is to you.”

Before that its prognosis was very bleak, very bleak indeed: “Regrettably,” it said, “based on Microsoft/Danger’s latest recovery assessment of their systems, we must now inform you that personal information stored on your device – such as contacts, calendar entries, to-do lists or photos – that is no longer on your Sidekick almost certainly has been lost as a result of a server failure at Microsoft/Danger. That said, our teams continue to work around-the-clock in hopes of discovering some way to recover this information. However, the likelihood of a successful outcome is extremely low….We continue to advise customers to NOT reset their device by removing the battery or letting their battery drain completely, as any personal content that currently resides on your device will be lost.”

That advice still applies.

T-Mobile, the fourth largest US mobile service and a unit of Deutsche Telekom, has stopped selling the widgets.

It’s not clear yet how many people are affected; Sidekick is believed to have 800,000-1 million users.

T-Mobile has offered users a $20 refund or, for those gravely afflicted, a $100 customer appreciation card to be used toward T-Mobile products and services, or their phone bill by way of compensation. “This will be in addition to the free month of data service that already went to Sidekick data customers,” it said.

Cold comfort that.

• Danger in the Clouds
• Microsoft Buys Danger Inc, Makers of the Sidekick Smartphone