The PSP is already on track to do better this year than last, and this price drop will ensure that more brisk pace for a few months. If there is in fact a redesign this fall, that will keep sales strong, and that's not even factoring in the solid titles coming out in the last half of the year. This could be a comeback year for the PSP
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.
Essay Pro