Well having aquired one for Xmas I am loving it so far. I'm a little dissapointed with the selection of games out so far, but I currently own X-men Legends II, Wipeout Pure (best game ever!), and Kingdom of Paradise.
Music sounds great, video plays flawlessly and sharp, and the rowser is pretty sweet too. I also own a PDA, which now collects dust because I mainly used my PDA as a type of emulation/gaming device, which the PSP is much better suited for.
Homebrew is kicking ass. There's a lot of homebre games and demo's as well as multiple OS's being developed and emulators progressing. But make sure you get 2.0 or lower for firmware, which means if you don't get it soon, you're gonna be screwed for playing emulators and homebrew - for now anyways.
There are many developments like a dual boot firmware in the works, psone emulator, ports of quake 2, and in the future maybe even quake 3! (there's only a map viewer for that right now, but runs fast) dowloadable magazines every mont to keep you busy and lots of accesories, so when you have a hole burning in your pocket you always have something to buy for the PSP
Not to mention most if not all games support some sort of multiplayer/online game mode.
If those things appeal to you get a PSP, but just a word of warning there's probably only about 5-10 games that you will like that are out right now, but there are some pretty sweet ones in line for next year.