I have a DS and PSP, It's a tough call between the two as far as I'm concerned, especially with such great things coming for the PSP in the near future. I guess I lean a little toward recommending the DS because it's got a better selection of games at the moment and it's cheaper. My recommendation would be to wait and get a DS Lite unless you're particularly crazy about some of the games in the current/upcoming PSP library.

DS
  • Meteos
  • Animal Crossing
  • Nintendogs
  • Tetris DS
  • Castlevania: Dawn of Sorrow
  • Metroid Prime Hunters
  • Osu! Tatake! Ouendan
  • Final Fantasy III DS (Upcoming)
  • ASH: Arcane Sealed Heat (Upcoming)
PSP
  • Metal Gear AC!D
  • Metal Gear AC!D^2
  • Hot Shots Golf: Open Tee
  • Lumines
  • Me & my Katamari
  • Valkyrie Profile: Lenneth (Upcoming)
  • Final Fantasy VII: Crisis Core (Upcoming)
  • New Rez style game (Upcoming)