How would You make it?
For me, it be this:
Basically same shape as psp slim, but with two better analog sticks and back-lit buttons when its dark.
Touch screen for web browsing and games. not all games will need to use of the touch screen however. but the touch screen brings new things for games..we can have games like socom and games that involve the touch screen.
Full Web Browser.
No Built in Camera or GPS because some people may not need that but there will be accesories who people for want that.
Better UMDs. (Blu-ray UMD? just throwin it out there..)
backward compatible with UMD.
Games will be like PS3 graphics. (if thats not possible, then wii-like graphics, or something.)
PSN support and PS store can be accessed directly from psp. (of course the current PSP could possibly get this with a firm ware update.)
Built-in Bluetooth.
Thats all i can think of, im not goin over the limit or anything, but u may feel free to do so.
Post your design of the next PSP.
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