Pundits are sounding the death knell for Nintendo on the introduction of the PSP. I think they underestimate Nintendo. If you want to understand how they operate, read the book :
Game Over : How Nintendo Zapped an American Industry, Captured Your Dollars, and EnslavedYour Children
by DAVID SHEFF
Read the section in the book about their response to MGM when threatened with a lawsuit over Donkey Kong. Their laywer flies across the country to tell the MGM president that they wouldn't settle. In person. The case never made it to trial; it was thrown out by the judge
Look at the GameBoy, the most popular handheld gaming system ever. Their newest system, the DS, will play all your old (and inexpensive to buy) GameBoy Advance titles, plus the new titles. The DS has two slots, a GBA slot and a DS slot.
The DS comes in a clamshell configuration, so the screen is protected from incidental damage. No such protection with the PSP.