I don't want the big, home console-style titles, unless they are exclusive to the system. If they are also available on a home console, I would rather play them on my big TV with a real controller.
As someone pointed out above, it can't really be much smaller and still be comfortable, but at the same time I stopped playing my PSP because it was simply too big, so I just would not bring it anywhere, and the Vita is larger. Maybe a PSP Go or GBA SP variant is the route to go.
I also think going with such a similar look of the system to the PSP is confusing to the mass market (see Wii/Wii U).







