For starters, I must mention that this is one of the sexiest gaming devices I have ever seen. It is shiny black with a nice widescreen, and sleek design that will make you the envy of all your friends. The buttons are laid out proper with the traditional Playstation triangle, circle, x, and square buttons where they should be. There is a left and right trigger on the top corner of the system. The system also has the directional pad as well as a small (and I do mean small) analog type control stick underneath the d-pad.
The system plays games via Sony's UMD technology. UMD is a mini-disc system encased for protection. This is the first time a disc-based system for handhelds has been available making it possible for more storage. I have heard ups and downs about this format from people, but to tell the truth I like it. The disc is in a plastic case with a small opening so that the data can be read. The UMD's are sturdy, and if dropped less likely to get scratched like a regular CD/DVD.
To date I have played two games on it: Hot Shots Golf, and Ridge Racers. These games are both beautiful - they are comparable to the graphics on the PS2. You will be hard pressed to find another handheld that will even compare graphically the PSP. The load times vary, but are not too annoying, and the games can be saved via a memory stick duo. (Warning: the memory stick is VERY tiny and even has a warning that they can be swallowed by children.)
The battery life has been noted in various forums and reviews as not being good. This being a problem is really based on what type of gamer you are. If you plan on using this as your only console... then the battery life will disappoint. However, for the occasional car/bus ride, or playing while at lunch it is perfect. The battery life really depends on how you play the games and what options you use. For instance playing a racing with brightness turned on fully will use more power as say playing a puzzle game with the brightness turned down. It really depends on your style.
The system also has the ability to play back movies via Sony's UMD (the system comes with Spider-Man 2), or they can be stored on a memory stick. The latter option would require a significant memory stick. You can also play Mp3 and view pictures saved on the memory stick as well. It also has wi-fi connectivity for multiplayer gaming.
For me this handheld has few flaws. I have read of UMD's popping out, buttons getting stuck and dead pixels or air bubbles under the screen. Mine however has none of the above mentioned problems. I will say that if you are fickle about keeping your stuff clean, you have your work cut out for you with this handheld. The shiny black covering will play host to many smudge and fingerprint marks, and the screen likewise. I recommend buying a screen cover to protect it from scratches.
All in all I have to say that this handheld has a bright future for it. If Sony stands behind it, then Nintendo has some serious competition in the portable gaming market. They say competition brings out the best and if this is true, then I guess that is good news for us gamers.