I think that the PSP is a great game console, but, it sucks as a movie player. I think that the PSP has better games that the DS has. But, I do think that the UMD movies are stupid, because you pay more for a UMD which less features that a DVD.
I think that the PSP will stay a thorn on Nintendo's side for a while, but, I don't think they'll completely take over the handheld market.