I think it looks alright. However, the inclusion of bluetooth leads me to believe that there may be other new features in store for the device that they haven't told us about.
If the screen is a touchscreen (honestly, why bother with the PS button on the top if the device has no other uses while closed), and if you have access to your PSN Friend list now, then it'd be worth the upgrade.
It might be like the DSi, with some minor processor improvements to facilitate a better OS and other minor hardware upgrades, with games otherwise remaining the same (aside from some small exclusive features, like camera support, or in this case, theoretical touch screen support - using a touchscreen in the LBP editor?).
However, if its just smaller and DD only, then meh.
Either way, I think this will make the PSP even more popular in Japan. DD is already real big over there (compare the Japanese sales of Patapon, released only on UMD, to Patapon 2, which was released simulataneously on PSN and UMD), and given the tiny size of thise device, I could see it taking off.
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