There's nothing fundamentally wrong with the PSP. It's a fairly awesome portable gaming platform which I will happily use either on a plane, train, general gaming and not to mention it's a godsend while on the bog. Some games work better than others of course, but a bit of instant action on Ridge Racer, Ace Combat and TOCA is untouchable in these contexts.

Now while I can't see it being used as a phone (as depicted in the photo) for the reasons previously mentioned (you'll look like a fool), I can't see an issue with using it as a Skype-like device - which I think is the main point of this development. Given the technology is in the PSP and relatively untapped (wireless connectivity, decent screen and now a web-cam-type device), it makes absolute sense to enable it to use these together. The biggest issue with video calls in my mind is that you're pretty much confined to your PC (yes, I'm ignoring laptops for the sake of my argument). A bit of PSP <-> PSP or PSP <-> PC video calling while away from home would be fine by me.

Of course, I'd much rather just wait till someone develops Skype for it! It's also a blessing to see Sony divert all their time and resource from updating their firmware week in week out in a futile attempt to stop people developing their own apps for the machine.