I would say the DS...
I'm sure the PSP will have better graphics, and all, but I find the rest of it's features far more than I want... I don't want a video player, mp3 player, etc... on my handheld gameplayer... when it comes to portable gaming systems I prefer to have it just play the games, and not have a bunch of fancy extra crap I won't ever use.
Plus, I just don't like how Sony is (seemingly) trying to take over the market... The only real system to worry about for a long time was a Nintendo system... the competition was few and far between... then Sony Released the PSX, and destroyed Nintendo's sales, and it's been hurting Nintendo since, everyone's being spoiled and wants all the extra crap the system comes with, if it doesn't have it, they just immediately dismiss it, and it's for that reason the Cube lost a good portion of it's potential sales. Sure it's sales went up for christmas and such, but that's because it's such a cheap system.
But I was fine with all that, because Nintendo still had the handheld market, though the Cube's sales did help quite a bit, that helped keep them in the market overall... and now Sony is coming out with the PSP, and that's gonna hurt Nintendo even more, because of all the bells and whistles it's got.
At least that's the way I see it... I'm not the biggest fan of Sony's consoles, but that's not to say I won't buy them, they're still great, but I'll always pick Nintendo first, then buy the Sony product later.