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For portable gaming the iphone is covering all the casual needs and some more
If you are hardcore gamer/user you can even jailbreak and play emulated sony/nintendo games
both my psp and ds are collecting dust at the moment.. in my vacations i always carried my ds but now seriously there is no reason to do it.. even if it's only a game like bejeweled is enough for me to play on the aeroplane and listen to my music library at the same time.. all needs covered

 

btw the new Ghost N Goblins for the iphone is a blast i enjoyed it more than the psp version