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Maybe mixing PSP and PSP Go, making just one with new stuff. Something like this:

Use the PSP Go model, but with the regular screen size and UMD (dunno why, but people keep saying this is the major flaw os PSP Go) and having at least 16gb of internal memory flash. Plus, improve the screen by using LED screen, make a built-in camera (two cameras?) so everyone can play Invizimals and EyePet PSP, revamp the OS (Android?) to feature regular skype and lot of new things, add friends list, voice/video/text chat, Google Chrome and/or Firefox support, add touchscreen (maybe not for games, just for the OS and navigation), 3G and better wi-fi, maybe a little faster CPU and more RAM memory, again just for the OS and it's applications.  Also, cut the price to US$149,00 and make 5 different colors avaible day one, that being black, white, blue, pink and red.

 

This way it wouldn't change the core PSP so all games would be compatible with all PSP models, but it would greatly improve - imo - the PSP towards a more easy and social machine.

 

There you have it lol