With funds from the International Business Machines (IBM) Corporation, Project SYNERGY was launched in January 1990 to address the problem of students deficient in basic skills entering colleges. Project SYNERGY I focused on reviewing and compiling a list of useful instructional software for basic skills remediation; Project SYNERGY II focused on software implementation; and Project SYNERGY III developed an integrated, adaptive, computerized management system. Twenty-two institutions in the United States and Canada, led by Florida's Miami-Dade Community College (MDCC), participated in reviewing and implementing computer software for community college students. The first section of this third year progress report summarizes the software review process results, including reviews of 259 different software packages. This section contains 35 tables providing ratings of individual software programs for reading, writing, mathematics, English as a Second Language (ESL), study skills and critical thinking, and multimedia packages. Part 2 provides information on 13 research studies conducted, explaining trends emerging from the studies. Part 3 discusses the implementation of the Project SYNERGY Integrator, a software management system to ensure software standards and track student progress through different programs. Part 4 describes the local area network (LAN) that comprises the Project's environment, focusing on the physical, social, and cultural conditions of the LAN. The final section presents an overview of the state of technology in education and future plans for the project. Appendixes include a cumulative directory of project participants, list of software attributes and learning objectives and software publishers, and applications software and hardware configurations. (TGI)