On a news group, several years ago, Praba asked:
i want to know the abbreviation for CE in WinCE. help me pls..
I replied:
Compact Edition
To which an eMVP (a Microsoft embedded Most Valuable Professional) retorted:
Microsoft is _very_ adamant that CE has no official meaning.
To which I replied:
Yes, they say that NOW, just like they say NT does not mean ‘New Technology’.
This is a little like Fahrenheit 451 if you know what I mean 
Anyway…Here is a KB article that provides some hints:
http://support.microsoft.com/kb/q166915/
(this clip is complete, but with poor punctuation corrected)
“In the name ‘Windows CE,’ the letters ‘CE’ are not an abbreviation for anything, but rather they imply a number of the precepts around which Windows CE is designed, including ‘Compact’, ‘Connectable’, ‘Compatible’, ‘Companion’, and ‘Efficient’.”
I think ‘Compact Edition’ is reasonable, and goes along with SE meaning ‘Second Edition’ and ME meaning ‘Millennium Edition’.