One word: PokemonBut yeah, when Sony announced the 185 dollar price for PSP, I think all hopes of Nintendo dominating another hand-held generation went out the window. Fanboys say that Nintendo raped all their other handheld competition before, but they were never up against a handheld made by a giant, heartless corporation allied with Satan and the ghost of Hitler's zombie. I really can't see how Nintendo can compete with the PSP unless they lower the price of the DS or include another pack-in game.
But it is good that Nintendo has some decent competition on their handhelds. Last time we seen that was during the advent of Sega's Game Gear. Because of this, maybe we can see some original and new games from both companies in order to compete with the consumer's dollar.
However, I would probably end up getting both in the far future after a price drop and special design editions since even $150 is too much for me to pay for a handheld--let alone a $200. Yep, I'm a consumer whore but a cheap consumer whore. Most likely, I would probably get a DS first mostly because of Wario Ware, Kirby, FFIII, and that Super Princess Peach game and I need a backlit screen since I stuck with my regular GBA just in case of situations like this. Also I got burnt twice from buying launch issue Sony gaming hardware. I'll wait 'til the second serial PSP comes out thank you very much.