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psp suggestions
more psn psp games, that will combat piracy.

psp2 suggestions
actually thumb sticks(a right and left stick), like mini versions on the DS3.

keep umd for bc reasons(but eventually fads out in later models or psp3)

built in memory(atleast 16gb)

all games on the psn = no piracy

a clam shell design to keep it protected, or atleast come with some sort of protection.

conclusion
the psp is already a great handheld multimedia device, with a couple updates here and there it will be near perfection. once it finally gets the psn on it i believe games will be on it, old games and new ones alike. and eventually the psp2 will come out with built in memory and all games, and movies as well, on the psn. now umd might still be included for bc purposes but then again they might just shun it.