PALO is a set of two programs, a boot loader, which is loaded by the PA-RISC firmware into memory and then executed, and a boot media management tool, which prepares and updates bootable media such as hard disk drives.
The PALO boot loader executable is stored in a file called iplboot. 'IPL' is HP jargon for Initial Program Loader (See the glossary). The boot media management tool is called PALO, which stands for PA/Linux LOader, just as on x86 the boot media management tool is called LILO.
Even though PALO is much alike LILO (both have a userland application and a boot loader executable), it's worth mentioning that PALO doesn't usually need to be called every time you build and install a new kernel, as LILO does.
PALO is strongly related to PA/Linux development. Thus, several versions have been released. Some changes in the way make palo operates are explained by the author of PALO, Paul Bame, in this mail.
For the knowledge addict: PALO can actually access and read ext2/ext3 filesystem, and therefore follow symlinks, whereas LILO bootloader will only know the physical disk address to access the kernel. See this for further details.