Jube808 recently posted a video on YouTube showing a PSP with a functional touchscreen, much like an iPhone.
I own both a PSP and a DS, and I appreciate each system for what it does better than the other. When I want a plethora of fun and original games that I can play for short periods of time, I use my DS. The DS touchscreen functionality is near-perfect. When I go someplace and want to bring a bit of music, a bit of video, and a whole lot of homebrew along with me, I take my PSP. I like to think of it as a miniature Playstation, because I mostly just use it to run my old PS games like Vagrant Story and Castlevania:SOTN; I only actually own two UMDs, as opposed to around ten DS carts.
Would the PSP benefit from touchscreen technology? Sometimes my iPhone just pisses me off to the extent that I wish it actually had buttons like a PSP. There is something to be said for being positive that the depression of you finger will result in the actions you intended. On the other hand, I could definitely see them taking full advantage of the technology with a touch-functional XMB, or something like that. What do you think?