As already mentioned, the PSP 3000 has a built-in Skype client, which can be used for free Skype-to-Skype calls as well as calls to and from regular phones (if you invest in paid Skype add-ons). While it's not going to be offering any serious competition to the iPhone (or any other dedicated mobile phone), the ability to have full Skype access -- without the need for a special headset -- could definitely be useful.
Another neat feature is PS3 'Remote Play', which allows the PSP to log into a PlayStation 3 on a home network or via the Web, and stream any video, audio, or photos stored on the PS3.
There's a built-in Web browser, too, but you'll lament the device's lack of a touchscreen (or even a numeric keypad) here. Many graphically rich pages will be cramped or broken on the screen, and the limited Flash support isn't particularly robust. That said, using the analogue stick to control the cursor is nice. And for many people, it will be a better mobile Internet experience than they're getting on a phone.
Separate from the Web browser is an RSS reader, but it could use an overhaul to make it easier to use and add your own feeds. There's also a dedicated icon for doing a Google search. Additionally, the PSP has a dedicated Shoutcast client that offers free streaming Internet radio. It's just a plug-in that works through the browser, but it's overdesigned and not as straightforward or easy to use as it should be.
One annoyance remains: video content from UMD discs (pre-recorded movies) and Memory Stick (home-ripped videos) can be displayed at DVD-level 720x480-pixel resolutions -- though quality will vary depending upon the compression of the video in question. That will fill the screen on a widescreen HDTV, but games are locked into the PSP's native 480x272-pixel display. So, if your TV doesn't have a robust zoom function, you're stuck with a window-boxed experience for games.
While the PSP's robust media and online functionality are impressive, for most buyers, they'll be decidedly secondary to its raison d'etre: gaming on the go. Yes, Nintendo's DS remains king of the portable gaming scene in terms of units sold, but plenty of people are looking for more sophisticated (less kid-oriented) games than the DS offers. And for those who can't abide the oh-so-cute antics of the Pokemon, Cooking Mama, Zelda, Mario or Animal Crossing games, the PSP will be a welcome breath of fresh air.
The graphics on the PSP are noticeably better than those on the DS as well -- games are essentially at the level you'd expect on the PlayStation 2.
Early on, the PSP was knocked for being little more than the "PS2 portable" because so many of its titles were simply ports of PlayStation 2 games. And indeed, its hit list is dominated by many PlayStation franchise standbys, including Grand Theft Auto, SOCOM, Tekken, and God of War. But many of these are phenomenal titles that have been designed for the PSP from the ground up. Genre strong suits include sports, racing, action and shooter games, but it's not all sweat and blood, either. Plenty of quirky puzzle games, such as Lumines, Puzzle Quest and LocoRoco are available, as well as a host of family-friendly favourites such as Daxter and Ratchet and Clank.
It's also worth noting that many of the PSP games include an online multiplayer component. Some games offer ad hoc multiplayer and others offer Internet play, or both. Online gameplay is free, and -- while the experience varies from title to title and is dependent on network speed -- it can be just as fun and fulfilling as playing on a home console.
Currently, UMD is still the primary vehicle for delivering games and media to the PSP. But Sony has been expanding the options available on the online PlayStation Store as well. The Store allows users to rent and buy movies and TV programmes, and it also allows users to buy downloadable games. All downloadable content is stored on the Memory Stick Duo.