@shams: Piracy would be rampant... if there where lots great games to pirate. I know the PSP has some great games but unlike the DS the PSP offers no different experiance than a PS2. I´ve tried out lots of different PSP games, the only one I found had it´s own value was Loco Roco, all the others where just the same as on a home console but had worse controlls due to one analog stick missing. Thats why I only use it as a video player and to emulate my old SNES games. I love the thing a lot but will not buy games that are almost only ports. The DS games have a very own appeal and offer a genuine experiance. The PSP lacks this, which is one reason the hombrew comunity is so big.
People only complain about piracy when a system isn´t doing so well, the PS2 is the most pirated system ever... because it is so insanely popular. The DS is much easier to pirate than the PSP IMO but it´s sold to a large demographic while the PSP is more for tech fans and teens who all know more abnout this stuff. The 360 is easy to pirate as well, still the attach rates are better than the PS3s which can´t be pirated yet.
I like the PSP a lot because it fitts my needs, but for most people it´s just a portabel PS2 with less games. Sony might have thought this combined with the media capabilites would have been enough, what it was missing all along was new games that made people interested in it. When the average gamer sees the PSP game lineup he/she will thin: "Seen this done that." Had Sony invested in some new Ips and made the PSP experiance more genuine it would be selling much more sofware IMO.