It looks like an iPhone 4 with buttons and an analog stick.

Should be pretty cheap. No touchscreen or any smartphone/tablet type features, not a phone, ... basically it has no tech that is expensive.

Granted, I also am not sure there is more than a niche market for it either.

You guys are completely missing the point! The latest NGP was announced over a year ago:

The specs

The NGP will come with a 5" OLED screen, two micro-analog sticks to simulate the DualShock experience, front and rear facing cameras, and a touchpad on the back of the machine. Hideo Kojima claimed you can "enjoy the same quality as PlayStation 3" on the handheld. He also described a scenario in which you could play a game on your PS3, leave the house and continue playing on the NGP, and then return to the game on your PS3 and television. He noted that this is just his dream, and there will be more announced in the future.

Here are the detailed specs, straight from Sony:

CPU: ARM® Cortex™-A9 core (4 core)
GPU: SGX543MP4+
External Dimensions: Approx. 182.0 x 18.6 x 83.5mm (width x height x depth) (tentative, excludes largest projection)
Rear touchpad: Multi touchpad (capacitive type)
Cameras: Front camera, Rear camera
Sound: Built-in stereo speakers, Built-in microphone
Sensors: Six-axis motion sensing system (three-axis gyroscope, three-axis accelerometer), Three-axis electronic compass
Location: Built-in GPS, Wi-Fi location service support
Keys / Switches: PS button, Power button, Directional buttons (Up/Down/Right/Left), Action buttons (Triangle, Circle, Cross, Square), Shoulder buttons (Right/Left), Right stick, Left stick, START button, SELECT button, Volume buttons
Wireless communications: Mobile network connectivity (3G), IEEE 802.11b/g/n (n = 1x1)(Wi-Fi) (Infrastructure mode/Ad-hoc mode), Bluetooth® 2.1+EDR （A2DP/AVRCP/HSP）

http://arstechnica.com/gaming/news/2011/01/ngp.ars

Where's that D-pad hiding? :p