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If you're going to get a PSP, better to get an older refurbished one anyways, I've heard not so great things about the newest versions screen quality.
The PSP has always been a powerful system and has only recently allowed developers to use the full processing power (reducing battery life a bit). I don't expect a true PSP "2" anytime soon.
I didn't see so much in the way of new PSP games for sale at the gamestore when I last went, but it has been around for a while and there's likely to be a lot of older(cheap!) games around. I'd suggest looking up and finding some games (and if they're actually available at the store) you'd enjoy before actually purchasing the system.
I know more about the DS, since I own one. It's in a state of transition right now with the DSi coming out. Developers may be able to use it to make better games than are out right now, but until they show they're going to, it's probably better just to stick with the PSP for handheld gaming. (The DS games lately have been terrible imo)
Also, FFT is an awesome game
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