I thought it suicide for Sony to enter into the handheld market. Everyone knows Nintendo has a monopoly in this industry...
I will say that sure, the PSP has some "neat" features, but as others have pointed out it's pretty much pointless unless you commute for long periods. That goes for all other handhelds as well, including all the Nintendo GameBoy variants and other "dead" handhelds, too.
The price is insane for both hardware, accessories, and software (games/movies) on top of it all. Even if you mod it and download games and the like (which I wouldn't condone or support), I still think it's just not worth it. To be 100% honest, I wouldn't even consider buying a PSP if it were $100 for the system, a large array of accessories, and 10 games of my choice and 5 movies of my choice - I would still turn it down.
It's just a matter of time before Sony stops production. I've been saying this from the day it was released. Although I don't like handhelds in general, it really is just suicide for anyone to enter that market to compete with Nintendo. The reason Nintendo sees a lot of profit in the market is because their system with it's price and games in the GameBoy is because it has such devoted children & kids who are into the system. Unfortunately, the PSP was geared towards an older audience, really, and older gamers don't look for portable gaming unless it's for a lot of commuting (like a lot of road trips or plane flights) so it really was destined to fail from the day it was announced.
Sorry Sony, but I think you really messed up with the PSP. I'm glad M$ hasn't made the same mistake of trying to enter into this industry of portable gaming.