"That being the case, to compare 3DS with Wii, or even GameCube, in terms of graphical quality based on this beautiful demo probably doesn't do the home console justice. The best demos we see based on actual game assets are of Dreamcast quality."

http://www.eurogamer.net/articles/digitalfoundry-vs-nintendo-3ds?page=2

The PSP2 doesn't exist.

The psp was a step or two below ps2 so I'm expecting the psp2 to be a step or two below the ps3 but definitely stronger than the 3ds.

I don't know if there is going to be a psp2 at this point though.

These graphics look par with gamecube games (if not better to me).  And these are just E3 demos. Nintendo still has not reveal the graphic specs. By the time these games release they will probable put most wii games to shame.

To be honest I don't know.  Sony has to be careful with the PSP2, I can already see Nintendo attracting quite a few PSP fans to the 3DS fold given that they have a more feature full system with some decent tech in it.  Furthermore the 3DS has the kind of software support from the get-go that the DS only dreamed of.

The questions is what can the PSP2 do to differentiate itself from the 3DS.  I've not sure that better graphics and a sleaker case are going to be sufficient this time.  Also given the software support that the 3DS already has, do Sony really want to blow by the 3DS's specs and risk having developers snub them because they don't want to code two versions of their game for hardware that is significantly different.

I think the PSP2 is between a rock and a hard place.  If it's too different from the 3DS and it could endanger developer support, too similar and it could endanger consumer support given the awesome strength of the DS brand.

A HD, touchscreen, 3D, with full controls and BC PSP would be awesome, but it would probably bankrupt Sony. I'm expecting a better resolution rather than real HD.

No shit sherlock (jk :P)

Regardless of the processing power in future handheld systems, I have significant doubts that many games (that are not ports of console games) will ever be released for these portables that produce dramatically better graphics than we have seen on the PSP or Nintendo 3DS. The two main considerations I see are cost (making a $20 to $40 Million handheld game seems like a bad business decision) and the extra detail is unimportant because the screen is so small. While this may not be the best analogy, playing videogames on a portable system is kind-of like playing a home console game on a 20 inch TV from 6 feet away; and I would challenge anyone to do that and really see the finer details that come from HD console games.