Blimey, this seems controversial.
Can understand why the fanboys are getting a tad steamed, but to be honest you can't argue that this looks impressive and does bode well for iPhone games (whether it worries Sony and Ninty or not - expect touch screen on PSP2 ;-))
Sure there are much better looking PSP games (have to disagree with those who think DS can do 3D, it's a great device but it just can't!) but you have to bear in mind that this is day one test code after having like a couple of days to play with a new SDK not a massive development team porting art from a mainstream console for a format that's in it's third year (and so should be churning out great games). They'll be harnessing a fraction of the power at this stage.
iPhone as a PSP/DS beater? Not sure. But it's already looking like it could be a viable format and Apple have already done a better job with their AppStore and got more content live on day one than Sony managed in the last 3 years with their PlayStation store!
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