Looking cool is one thing and functionality is another. First of all, both devices are targeted to different markets in my mind. Yes, Nintendo will definitely be targeting a younger audience (kids, teens and then adults).
The PSP is decidedly an adult product based on its design, features and price point.
I’m certain part of the DS’ design is one part Game & Watch nostalgia and another part for their target audience. Kids and teens aren’t the most responsible of people and tend to thrash their belongings. I see kids dragging their GB SPs all over the place and while they’re beat up, covered with drool, stickers and whatnot…they work. The clamshell design of the GB SP and the DS are great because the screens are almost always protected. Another thing going for the platform is the quality of games available. The DS’ new functionality will likely enable new forms of gameplay. And for the DS, gameplay is the key selling point. It plays hundreds of GBA games and new games. It has wireless abilities, microphone/headset, wireless texting, game sharing (i.e. 4 can play using only one card) etc. At any rate, if it has good games then that should be the reason for buying it and not because it doesn’t look cool.
The PSP, while similar in some respects, will have many different features that target it towards another market. The only challenges Sony faces is the handheld market in general, battery life issues, wear/tear issues on the optical unit, durability of the unit in general, and developing original content. People will only take so many ports of PS2 games. Because the device is limited in control they will have to come up with new games that maximize the controls. I’m excited about the additional features like GPS, etc. My only concern is the proprietary interface we’ll likely have to use and the implementation of all these supposed features. Sony does have a mixed record in consumer electronics…my hope is that they put in the engineering effort they put into their high-end portable MD units and then I’ll be happy. My Sony MD units have lasted forever and work extremely well even though I abuse them.
So, I’m not saying one is better than the other. I’m saying it’s the software that makes the difference and not the looks of the system. In the end I’m still getting both as both will likely have titles I want to play. 
