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Handheld gaming console is totally different from PS3 or Xbox360.  I own PSP, DSi, and PS3, and I find PSP to be a total failed device in handheld industry. 

Nintendo knows what ppl expect from handheld console.  No fancy 3D graphics or multi-functional capabilities like mp3 or movie viewer.  I mean what kind of outdated person carries that berky PSP just to listen to mp3 these days? If I see a person listening to music with PSP on street, I would just laugh at him/her.  Use iPod for music; watch movies in big screen at home...jeez...

Also, some ppl say PSP's graphics is awsome.  Total false.  No AA on such resolution just fails.  There are a number of 3D games on DS and even they look better than PSP's. 

IMO PSP is only for kids who want to play PS3-like games when their parents won't allow them to have one. If you wanna play an action or 3D games with good graphics, buy PS3 and connect it to big screen. 

In this decade, DS is ruling the handheld industry. Period.