It's not surprising that the DS is way more popular than the PSP. I personally hardly hear of people wanting/having PSPs, and i've even heard of people getting a PSP but not wanting it anymore because they like the DS better.
Good for Nintendo I say. People are obviously going to want something that costs less, is innovative, and has a load of games that they like. They only thing that might have discouraged some would have been the design, but obviously with the DS Lite, they've fixed that aswell.
To me, looks like it'll be going that way for the next load of consoles aswell. Wii = low cost, like the DS, innovative (controller etc.), and so on. PS3 = pretty much the opposite.