Indeed. PSP has almost ps2-class graphics while the DS has better than N64 class graphics. Considering how small the screens are, the difference between the two is purely academic.
PSP has a larger screen. DS has a touch screen.
Both will support wifi in some form.
DS battery life is 6-8 hours (and considering how Nintendo tends to underrate their battery life, it'll be more like 7-8 hours). PSP has 90 minutes of video playback and up to 6 hours of gaming depending on how the game is programmed and how often the UMD drive is accessed.
Game lineup for both is quite good. DS has the bonus of being able to play GBA (and only GBA) games.
DS is a clamshell design. Protects the screen.
PSP doesn't have this, but it's elementary to have a sleeve like an iPod or cellphone one to protect the screen.
DS is heavier than the PSP.
PSP is bigger than the DS.
DS has no moving parts. PSP has the UMD drive.
DS has 1 gigabit DS cartridges. PSP uses 1.8 gigabyte UMD discs.
DS is confirmed at USD$149. Launches this year in North America first.
PSP has prices rumours ranging from USD$199 to USD$399. It will launch in Japan first and is slated to launch in spring of 2005. Some analysts think that it may be delayed due to the tendency of the PSP to run hot, the battery issues and the incomplete launch game titles.