Definitely put it towards a 4GB or 8GB memory stick.
If you are hungry for gaming, there is more than enough powerful homebrew and emulation options to give you plenty of games. The quality commercial PSP games cannot be ignored so many games should be implemented into your PSP's budget as well over time.
That is, if the new $169.99 PSP's are downgradable.
If anyone buys a PSP at that price, please post what firmware came pre-installed on it.
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