Palm cleared up its leadership questions at the top today as it promoted Jon Rubinstein from executive chairman to chief executive. Meanwhile, current Palm CEO Ed Colligan is taking a job at Elevation Partners, the private equity firm that owns much of Palm.

Rubinstein is the logical choice to head Palm in the wake of the launch of the Palm Pre, the new smart phone that is pretty much flying off the shelves in Sprint stores. Colligan and Elevation’s McNamee recruited Rubinstein in 2007 when he’d been enjoying life on a beach in Mexico after leaving Apple.

At Palm, Rubinstein jumped at the chance to re-engineer Palm’s phone strategy from the ground up, starting with a new webOS, or phone operating system, that was built to marry the phone and the social web. Under Rubinstein’s direction, Palm’s engineers came up with a lot of the right choices. The Pre has been praised for its ability to multitask between applications, its vivid 3.1-inch touch screen and ability to marry the pictures of your friends on Facebook with their phone numbers in your address book.

It remains to be seen if Palm can make a dent in the growing Apple iPhone empire and steal business from rivals such as BlackBerry and makers of Google Android phones. The move suggests that Rubinstein’s new leadership will drive Palm forward while the company dispenses with the older history that Colligan represents. At the same time, Colligan, who spent 16 years at Palm, will still be in the picture as Palm’s largest shareholder.

Rubinstein has made some high profile appearances for Palm. He shared the stage at the Pre’s announcement at the Consumer Electronics Show and at last week’s Pre launch party in Hollywood. He spoke on stage with McNamee at the recent AllThingsD conference.

Now Rubinstein, who was considered the father of the Apple iPod, has to pull off a smooth launch for the Pre overseas, as well as line up successor products such as the rumored Palm EOS.