Inclusion Criteria:

- Patients must have an established diagnosis of myelodysplastic syndrome (MDS) and
have either: Low or intermediate 1 risk disease by IPSS with symptomatic anemia
(defined as hemoglobin less than 10.0 g/dl) or transfusion dependent anemia (defined
as requiring ≥ 4 units of blood RBCs administered with a pretreatment hemoglobin
value of ≤ 9 g/dL in the 8 weeks prior to Day 1 of treatment in this study). Patients
with anemia must have no response to at least to 6 weeks trial of erythroid
stimulating agents (ESA) [erythropoietin/ darbepoetin]. Patients with serum
erythropoietin levels more than 500 mU/ ml on diagnosis are eligible to the study
without erythropoietin/darbepoetin prior treatment. Patients who do not meet anemia
criteria are still eligible if they had thrombocytopenia with two or more platelet
counts < 50 x 10^9/L or a significant clinical hemorrhage requiring platelet
transfusions or if they had neutropenia with an ANC < 1 x 10^9/L; Intermediate-2 or
high risk MDS by IPSS.

- Patients ≥ 60 years with AML by WHO classification and myeloblasts percentage 20-30%
(RAEB-t by MDS FAB classification) are eligible for the study if deemed not suitable
for induction chemotherapy or declined that option.

- All prior treatment must have been discontinued 28 days prior to Day 1 of treatment
in this study except (ESA) and colony stimulating factors where it should be stopped
14 days prior to start therapy on study, and hydroxyurea should be stopped 2 days
before.

- Prior bone marrow or stem cell transplant is allowed.

- Secondary or therapy related MDS patients are eligible.

- Patients with chronic myelomonocytic leukemia (CMML) are eligible.

- Patients must have a performance status of 0 - 2 by Zubrod performance status
criteria.

- Pretreatment pathology materials must be available for morphologic review. Collection
of blood and marrow specimens for pathology review must be completed within 28 days
prior to registration.

- No other prior malignancy is allowed except for the following: adequately treated
basal cell or squamous cell skin cancer, in situ cervical cancer, adequately treated
Stage I or II cancer from which the patient is currently in complete remission, or
any other cancer from which the patient has been disease-free for at least 2 years.

- In calculating days of tests and measurements, the day a test or measurement is done
is considered Day 0. Therefore, if a test is done on a Monday, the Monday four weeks
later would be considered Day 28. This allows for efficient patient scheduling
without exceeding the guidelines. If Day 28 or 60 falls on a weekend or holiday, the
limit may be extended to the next working day.

- All patients must be informed of the investigational nature of this study and must
sign and give written consent in accordance with institutional and federal
guidelines.

Exclusion Criteria:

- Patients must not have received prior remission induction chemotherapy as treatment
for MDS.

- Patients must not be pregnant or nursing because of the potential risks of the drugs
used in this study. Women/men of reproductive potential may not participate unless
they have agreed to use an effective contraceptive method.

- Patients who are known HIV positive are not eligible for this study.