Can Palm’s upcoming operating system, Nova, revive the fortunes of the flagging company? Palm’s biggest investor, Elevation Partners, is putting $100 million into that Nova, after already spending $325 million for 25 percent of the company last year. Maybe all Palm needs is a really good tune-up, but it is going to be tough to go up against all the newly-polished goodness coming from the iPhone, Android, and Blackberry.

When Elevation first invested, it brought in former Apple hardware chief Jon Rubinstein to head up the company. The fruits of his labors may now be just about ready to be unveiled. But will it be enough?

Nova is supposed to bridge the smartphone gap between the hard-working Blackberry and the upmarket iPhone, and is expected to be announced at CES in January. Everyone else (from Android to WinMo to Blackberry itself) is also trying to bridge that gap.

The stock is up 20 percent on the news to $3 (Elevation is buying its new shares at $3.25). Did Elevation just sink another $100 million into a clunker, or is the Nova going to be a sweeter ride than anyone expects? I’m thinking clunker.