Hmmmm... first of all we have to decide what we want. A redesign or a PSP2. I say redesign are plenty at this point, so lets stick with the PSP2.
The PSP2 shouldent be IMO a to big technology leap, mainly because its already leading the handheld graphics department by a huge leap. I would like to see the processor speed bumped up to ~ 2x as much, and the RAM from 64 mb to 128-250, and even add more dedicated video/audio memory ( lets say 64/16).
Now, if this is ready, lets bump up the screens resolution, but keep the size. Lets say 720*405 resolution would give us a great picture quality for a 16:9 screen :D If we are ready with this lets add a second analog nub, but something that is even better then the one used on the PSP S&L. Also, keep the mic, but dont put on a camera... its a waste of money, mainly because nobody will want to use a low-end camera to take pics and a higher-end camera would make the price of the device be ridiculously high.
Now, what storage should be used for games? I say UMD ( kill me if you want to ), but one that has more capacity ( lets say 3-4.5 GB ) and faster read speed. DLC is great, but going only for DLC is not a good idea, especially for a handheld IMO. And on what would DLC be stored? Well on the built in 8-16 GB memory and it could be expanded with memory cards that can hold up to 40 GB memory ( yep, they already have 32 GB ones, so IMO untill then 40 GB cards would cost probably ~ 50$ ).
Now that we have all this what is the last and most important thing left? Yes, battery life. The battery should last over 6 hours if everything is on max, and 9-10 hours on low... that would be IMO fair enough ;)
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