They both offer some great unique titles. I only have a PSP at the moment b/c IMO the legit game library + emulated game library + video + music functionality + Remote Play is greater than the single function the DS has to offer, which is its game functionality.
And while the PSP is going through a game drought, it's pretty irrelevant if you're going to be buying the system soon. The back library of worthwhile games is ginormous.
My Top 5:
Shadow of the Colossus, Metal Gear Solid 3, Shenmue, Skies of Arcadia, Chrono Trigger
My 2 nex-gen systems: PS3 
and Wii 
Prediction Aug '08: We see the PSP2 released fall '09. Graphically, it's basically the same as the current system. UMD drive ditched and replaced by 4-8gb on board flash memory. Other upgrades: 2nd analog nub, touchscreen, blutooth, motion sensor. Design: Flip-style or slider. Size: Think Iphone. Cost: $199. Will be profitable on day 1.
