Only thing the PSP is missing is 3G, and slightly open development (for those who don't want to hack their PSP) to allow some basic programs it's missing (such as an alarm clock, which is available if hacked).
First off, the PSP is a real gamer. It's designed for gaming. It has net, though it is questionable at best, pre-installed VoIP is nice. The PSPgo also makes a great MP3 player, though the Media Go program needs some work (just needs playlist syncing). A higher resolution screen with multi touch (for typing), a second analog stick, GPS, and it's damned near perfect.
Full 2G/3G (and maybe even the upcoming 4G), with full VoIP supprt, and who the hell needs a phone?
Media Go is just awesome too. Converts my songs into MP3 format as I transfer my songs, and it's very easy to buy games.
Though most PSP games are $20 (via PSN download), it's more than worth it to have real games.
Who the hell wants a new iPod touch? Give me a PSP 4000 or N2000, and I'd sell my iPod/iPhone if I had one.
It's sad that someone thinks the iPhone is the future of portable gaming. The PSP transfered to a phone would be better than a iPhone transfered to a gaming device.