Honestly, I don't think I'll ever understand why people pay up to $500.00 for something that just plays music. $500.00 can build a pretty decent computer, which can obviously do a billion more things than an iPod can. As well as store a lot more music.
Just cause it's portable? PSH.. there are far more less expensive mp3 players out there that do the job a lot better than my old iPod did. What a waste of money that was. :x
Anyways, if you feel like blowing a lot of money on something.. I guess they "look cool". I would go with the PSP, just cause it can do a ton more, and is less money.