I have a kind of love/hate relationship to my PSP.
I've tried really hard to abuse its *possibilities* but always come to the conslusion that all it really is is a gaming machine. The worst culprit is, IMHO, its short battery life. Yes, its fast CPU and graphics chip set needs power but when on the road I always have the feeling it's going to die on me when I'm in the middle of something.
Movies: I have to transcode, bleah. Then I'd rather use my Axim x50v together with TCPMP which usually plays whatever file I throw at it. Combined with a 2200mAh battery I'm good for several 45 min TV shows and a movie or two (even three).
Then it happens: I sit down and play a little Ridge Racers and I'm fooled all over again. It's fun and it looks *good*, something that actually counts (to me) in a racing game. All in all, though, my DS gets far more play time (anyone tried Puzzle Quest? No? For your own good don't. You'll loose to much precious headphone time!
)
I guess I'm a bit of a handheld freak, though so I probably won't sell my PSP (until a new one comes by... *sigh* I'm not even sure I'm in it for the games anymore, it's more of a handheld obsession
) but using it as my all-in-one machine as Sony wants us to? No. Been there, tried that ("done" is too strong).
If you aren't aching for any of the PSP games, my suggestion would be to get a DAP/PMP instead; better audio quality, easier to handle and better battery life.