A pen-based portable computer system, and more particularly, to a computer system which includes a host computer or a server that is adapted to interface with one or more wireless interface devices over a radio link. The wireless interface devices are pen-based devices which include a digitizer panel and are adapted to operate on a mouse mode, as well as a pen mode. In a mouse mode, pen down events are translated into mouse data and transmitted over the radio link to the remote server or host computer. In a pen mode, pen down events in an ink field are formulated as pen data. In accordance with an important aspect of the present invention, the wireless interface device includes a local handwriting recognition system for translating handwriting into characters which are then transmitted to the remote server or host computer over a radio link for processing.