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Personally I don't think that an internal HDD would be a wise or necessary move on Sony's part - all it would do is increase the size and price of the device. Perhaps a better solution to this would be to include a second memory stick slot, that way you have one for gamesaves, music etc and another one for larger files such as videos and PS1 games.
A second analogue nub would be a nice addition for the sake of the PS1 emulation, but not all that necessary. Personally I'd rather the current analogue nub received some treatment so that it would feel more.. analogue because at the moment it's not easy to move all that delicately with it.
If there was to be one alteration that I'd like to see made to the PSP it would be a clamshell design (With it being manufactured on a 65nm fabrication process it should be easy to shrink the PSP down to the size where it's not too thick for this to be acheived). My main problem with the PSP at the moment is that it doesn't feel all that portable, I don't want to take it out of it's hard case whilst I'm not using it for fear of damaging the screen, and honestly leaving it in the case makes it far too large to put in my pocket comfortably.
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not so many fw upgrades would be a start :mad: