But right now as it stands, it does look like Nintendo would still have the edge, unless sony innovates like crazy. Graphics isn't innovation I am talking about. 

I agree with a lot of your points although disagree with a few.

1.) I doubt that the psp2 will use disc based media.

2.) I don't think brand name has as huge of an influence as some give it credit for. Look at the rise of the xbox , and the fall of the playstation brand. Casuals do not buy based on name, but price and games that suit their preferences. Also, what is seen as cool.

Yes, if PSP2:

1. Has something to appeal people.

2. Has better third-party support.

3. Has great million sellers like NSMB, Nintendogs, Mario Kart, Brain Age.

4. Has a lower price than 3DS.

Also, 3.5 is the time 3DS need to charge battery. The battery is about 3-5 as Dsi.

 Until we know anything about the PSP2 I don't think we can really judge. I do think though the PSP2 has got a good chance of doing well, as I think it's media capabilities could be a strong selling point combined with Sony's better online infastructure. 

 However Sony need to get their **** sorted to make it work - all PSP2 games needs to be on the PS Store, online services on the console need to work and be useful and they need to sort the pricing of mini's / online retail games out as at the moment they're simply far too expensive compared to the iPhone's offerings (i.e. Angry Birds). They need to sort their software lineup out too - sure I wanted them to do awesome portable Uncharteds and God of Wars - but they need games I can play on a 20 minute train journey or whatever too, and they need to be more then just another tetris rehash or PSN store port.

 This is the most challenging handheld generation yet for both Sony and Nintendo I think, as no one knows what effect the iPhone and similiar devices will have on the market. They both seem to be positioning their devices as high-end graphical type things to distinguish themselves - which is a good move - but I'm still not sure people with iPhones will feel they want another thing to carry around, better games or not.

I love when the thread is done with in its first page :)

The points in the OP aren't really possible - lower price on games? They'd have to make a product with the same specs as the current PSP and I REALLY don't see Sony doing that - unless they wanna go for a full-on apple app store type of senario - in that case it'd be in a different category than the 3DS - - not to mention several random devs stating that they were *impressed* with the new PSP device specs

So without further adieu: /thread

Funny how in other threads about the PSP2 being DOA, certain people moan and groan saying "the PSP2 isn't even announced yet" or "let's wait and see before we speculate" or "it's too early to have this discussion".  When it's the other way around, about the PSP2 being the victor over 3DS, suddenly these convos are alright to have! 

Anyways, my take on the OT is that all this wishful thinking is reminiscent to an earlier time...  Reminds me of 2005 and the DS vs. PSP speculation all over again... And we know how out-of-hand that got in retrospect.

I doubt this next handheld gen will end any differently.

WHAT!?

You have #2 completely backwards.  Do you ever wonder why everything has i in front of it?  Because people that don't know any better or are uninformed buy almost stritcly off of brand name or what they've heard of.  Parents have heard of Nintendo, Mario, Zelda, Brain Age, Nintendogs, DS, etc.  The 3DS could be crap in a box at $300 and it will sell based purely off of those things.

Sony will just f*ck up with the PSP2 like they did with the PS3,let's be realistic here...xD.Just joking,but I don't think the PSP2 will beat the 3DS...It needs to be like 50$-100$ cheaper or to have something HUGE on it,something similar to  MHP3rd in Japan...but have the same effect all over the world.

How does the 3DS have an awesome launch line-up other than Professor laton? Yeah some good games are coming later but not at start...

That's what they said about the PS3...