does that mean that the PsP has it's days numbered?

no.

sony never drops a platform like that.

at most the phone will be able to play PSP Games.

PSP will be cheaper and have bigger userbase.

if they did, it would be with the PSPhone.

I don't understand the question. Are you saying they are going to use the PSP Go to target the iPhone, or that they are going to make a phone that plays PSP games and has the PSN to target the iPhone?

Either way it will never work. If you meant the PSP Go, it will be too expensive and no where near as much content as the iPhone. It will also have much more expensive games.

If they made a PSPhone, it would still fail to take down the iPhone because it would again be too expensive or lack a lot of the iPhone features.

If Sony goes after the iPhone, they will get crushed, and I doubt they will try and replace the PSP right away... so when the SonyPhone withers on the vine, the emphasis will shift back to the PSP as their handheld gaming device.

Sony really had something when the Walkman came out many years ago, but since then they've struggled to really tap into what consumers want in a portable music device... they're very prone to pushing proprietary tech (MD, UMD, etc.), but to do that, the rest of the package has to be compelling. Apple has polished this to an art considering the devices have no storage expansion options, are tied at the hip to iTunes, etc., but yet they control about 80% of the music-player market, and they appear to be doing really well in the smart phone market. Sony had better have something drop-dead incredible to take on the iPhone. Considering Sony's inability to storm the market with the PSP, PS3, and Blu-Ray (adoption is still a small percentage of DVD), I would have to say their chances in the smart-phone market are low.

I would expect the playstation phone to be a psp with phone capabilities and a touchscreen .. I doubt they'd drop the psp because not everyone wants their handheld as a gaming device.

Sony are learning. If you look at the Sony X Series Walkman, in terms of being a PMP, it is simply the best, but the AppStore rules the day it seems.

As for the PSP and PSPhone, if they do have some sort of AppStore it well definitely help, but the main problem is price. Now Apple can pretty much get away with charging extortionate prices because of the way that iPod users have to get iPods is they want to use their stuff bought through the iTunes store, so it is going to take something big from Sony if they want to get consumers to change

Aren't they doing that with the Aino?

Sony will lose badly. Odds are, it would cost much more than an iPhone with features that are less engaging.