Ill start by saying I just bought a DS and am very happy with it. I will tell you way I chose the DS over the PsP (not out yet in US).
PsP - $150-$350 rumored ($190 in japan so $150 is likely)
Pros: Awesome 3d graphics ! Cd format, plays games rumored to play movies and music cds as well as be able to surf web. Has an anolog stick so games can be ported better from ps2. Great 3rd party support.
Cons: Cd format( I have owned both ps and ps2 and both have developed laser reader problems) so Im guessing the PsP will have the same problems seeing as the system will be prone to bumps and shocks much more than a ps2 sitting on a shelf. Need to buy memory cards to save data. Battery life is VERY suspect(some games will deplete it within 2hrs, max rumored 6hrs).
Only launch games at launch.