To be entirely honest, I don't care in the least what the PSP can do besides play games, just like I didn't care what the PS2 could do besides play games when it's technical abilities were revealed (though doubling as a DVD player is more useful than any of the PSP's capabilities to me).
I buy my consoles to play games, and if I bought handhelds, I'd buy them to play games. Even if I got the UMD movies given to me for free, I still wouldn't be able to watch them on such a small screen. That doesn't mean that I won't buy either handheld from the current generation, but if I do decide to, none of that other mumbo jumbo will influence my purchasing decision at all. I don't care if the PSP is a videogame player + movie player + audio player + telephone + nuclear weapon detinator + toaster + pez dispenser, as long as it plays good games. And right now, there's nothing significant from either side of the playing field (the Nintendo DS being the opponent) that really holds my interest.