Wow, I completely forgot about Kingdom Hearts. Is that supposed to come out in '08? I'm guessing it's only confirmed for Japan at this point, though. Either way, that makes the PSP so much better in my eyes.
Considering how well Square games have been doing on the platform, I'm thinking the PSP is just gonna get more support from them. I just saw FFXII: Revenant Wings sales, and by DS standards it's pretty much a flop in America. I know the FF remakes have done really well on the DS, but it's looking like the PSP might turn into Square's go-to handheld.
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.
