We present results of our ab initio studies of electronic and dynamic properties of ideal palladium hydride PdH and its vacancy ordered defect phase Pd(3)VacH(4) ("Vac" - vacancy on palladium site) with L1(2) crystal structure found experimentally and studied theoretically. Quantum and thermodynamic properties of these hydrides, such as phonon dispersion relations and the vacancy formation enthalpies have been studied. Dynamic stability of the defect phase Pd(3)VacH(4) with respect to different site occupation of hydrogen atoms at the equilibrium state and under pressure was analyzed. It was shown that positions of hydrogen atoms in the defect phase strongly affect its stability and may be a reason for further phase transitions in the defect phase. (C) 2010 Professor T. Nejat Veziroglu. Published by Elsevier Ltd. All rights reserved.