Wow, this thread still exists. I guess I'll post my updated opinion then.
After getting a used PSP from a local friend on the cheap and going through the downgrading to 1.50 and updating to custom firmware process, I've decided it is the ideal homebrew system (rivaled only by GP2x, but this is a DS vs. PSP thread). I also managed to prove myself wrong, there is one commercial game that appeals to me and that is Gitaroo Man. Granted, it's almost a straight port from PS2, but still very good.
Compared to DS homebrew, it's nice having proper SNES and Genesis emulators. There's also the somewhat recent addition of Sega CD emulation with the Picodrive port, and Sony's own built-in PS1 emulator is more or less perfect. I've ripped and converted a number of my old PS1 games and have been particularly enjoying the Spyro series in handheld form.
I've even set up my battery and memory stick so I can easily install custom firmware on any PSP regardless of firmware version. Not that it matters, since now that I bought this one from my friend I'm probably the only person in town with one. :|