Nov-Dec 2010 seems the right time for PSP2, probably two years ahead of PS4.
Keep an eye on Nvidia and Imagination Technologies for design wins. Nvidia was already supposed to have won the graphics contract back in 2006 (just Google: Nvidia PSP2, and you'll find articles)...
PSP2 will be more DD friendly, but cannot rely completely on DD. There has to be physical media of some kind, and I'm certain it'll be solid-state. I cannot wait for a PSP with games that load almost instantly, like DS. I also cannot wait for multi-touch for gameplay and menu navigation. If the price is no more than $199, I think it'll be perfect.
The PSP can be concidered a success. It's the ONLY non-Nintendo gaming handheld to sell tens of millions of systems and survive in the face of the all-powerful Nintendo. Sony needs to build on PSP's relative success with the next generation, and I welcome its arrival, hopefully within the next 22-23 months.