Personally, I think the DS is the best system.
Many of the multimedia functions included in the PSP have found their way to the DS. Many are third party peripherals but I hear that the DS makes great use of them.
The games for the DS, In my opinion, are some of the best experiences you will ever have. Its a new way to play the games that we all have become familiar with. Also the games are pretty amazing in terms of the use of the touch screen.
Zelda Phantom hourglass is a must play! I currently have about 30 DS games and 8 Wii games.
Since the Wii came out, I kinda retired my DS but when the good games come out that I like to play, my DS is pulled out and played again!
My nephew has a PSP. Its a slick system, but I most perfer the DS. It just has capabilities that the PSP just can't match with its multimedia functions.
Again this is just my opinion, but I feel you can't go wrong with a DS!