What you're talking about, PSP-4000 or whatever, is already coming this year.
Completely different than a next-gen PSP2 handheld.
CPU: significant upgrade over PSP CPU. Probably a micro CELL with 1 SPE the strenght of Cell is the parallelism of its SPEs. if you remove all but one what's the point of the CPU? what you described has no sense at all (hint, the S in SPE stands for SINERGIC, hint)
GPU: PowerVR would be a much better choice than any equivalent Nvidia. Could have shader 4.0/4.1 capability and a very efficient design with low bandwidth requirements. out of reality
RAM: At least 128 MB this could be, which kind of ram is debatable though
resolution: 480p on a 3 or 4 inches screen, really?
the best multi touch screen impementation possible, plus tilt/motion sensors.
$199/fall 2010. all of the above at 199$? maybe bundled with a whore that jerks your cock while coming home from the shop?
I do agree PSP2 should be able to play PS2 games somehow, that could be a huge draw. this would basically means cropping 6 face buttons, 4 triggers, 2 analogs and a d-pad on a "supposed to be" thin handheld...
launch with GT Mobile, a new God of War, a new Grand Theft Auto and a Final Fantasy game to ensure huge, massive sales at launch. this would means development for those games should start 3 years before the platform even hit the stores, apart from convincing some third-parties to put their best franchises on a thin launch installed base, obviously.
Sony must form relationships with western developers and get them excited about working on a handheld that can run games that are like current-gen consoles in 480p. something Nintendo cannot offer with DS and probably won't offer with DS2, assuming DS2 is somewhere between a GCN and Wii in power and only capable of running last-gen graphics (given that DS is only capable of PS1/N64 like graphics). PSP2 must be capable of running UE3 engine games--I think a very powerful, efficient PowerVR SGX GPU will allow that in a portable for reasonable cost.
Beyond graphics, PSP2 will allow gameplay that DS cannot do, because of multi-touch. Sony needs both the hardcore games and the DS-like 'lifestyle' casual games/software. PSP2 has to be seen as a fun system first, with lots of casual software that WE GAFFERS don't give a shit about (but will help sell the thing) even though it'll have the hardcore games (that GAFFERS DO want) to back it up.
Fall 2010 is the soonest that the economy might get better. This year will be a disaster at best, assuming we don't slide into total depression and social breakdown, then no new game machines will launch anytime soon.