this game is out btw, anyone tried that yet?

Let's take the comparison item by item:
CPU: 333Mhz proprietary on PSP, 412Mhz ARM on iPhone. Apparently the PSP uses a MIPS32-based CPU. Comparing CPUs based purely upon clock speed is often extremely misleading, so it's hard to say who wins here, but my money is on the iPhone.

GPU: "None specified" on PSP vs. PowerVR MBX 3D on iPhone. The PSP uses another MIPS32 333Mhz processor for graphics and other media duties. It handles 33 million triangles per second with 664 Mpps fill rate. The best benchmark I was able to quickly find for the PowerVR MBX 3D rates it at 2.36 million triangles per second with a 33.56 Mpps fill rate. In the graphics department, then, the PSP is absurdly more powerful.

Screen resolution: 480×272 at 16.77M colors on PSP, 320×480 Truecolor on iPhone. 130,560 pixels on the PSP vs 153,600 pixels on the iPhone, so the iPhone has about 18% more resolution. 16.77M is what the ambiguous term "Truecolor" is usually taken to mean, so color depth is theoretically the same. However, the PSP can actually DISPLAY all those colors, while the iPhone uses a cheaper screen capable of displaying only 262,144 colors. That means the PSP can display 64 times as many colors! Still, practically speaking resolution is probably more important, so I'll give this one to the iPhone.

RAM: 32MB on PSP vs. 128MB on iPhone. The newer editions of the PSP, first of all, actually have 64MB of RAM. Secondly, you cannot actually use all of the iPhone's memory in your application, because the iPhone is doing more than just running your game. Only about 50MB of RAM is actually available for applications to use. Furthermore, the iPhone's GPU uses the system memory for textures, vertices, and so forth, so this cuts into the amount of RAM available to the application. The PSP appears to have only 2MB of memory available for the GPU, but this does not come out of the application's memory. Apple suggests that you use no more than about 26MB for graphics data, so you can use more than on the PSP if you're willing to not use that memory in other parts of your application. The fact that the PowerVR MBX uses shared memory undoubtedly has performance consequences and is a probably a significant factor in the poorer graphics performance of the iPhone. Overall, since newer PSPs have significantly more memory available for applications, I'd have to say that the PSP wins this one.

Onboard storage: not even going to bother with this; who cares how much onboard storage the iPhone has when the PSP has removable memory in the form of memory sticks. Each memory stick can potentially hold as much as 32GB, which is the largest size any iTouch devices comes in, and you can swap in or out as many as you want. The PSP is the hands-down winner when it comes to storage; I doubt anyone would dispute that.

Connections: again, not going to bother with this. Offhand, the stuff in the chart looks right to me, but I'm not sure what kind of relevance this has to games.

Of course, there's also the controls – the PSP has actual buttons and an actual d-pad, while the iPhone has a touch screen and an accelerometer. How you feel about that is probably up to individual preference, but I will note that any game that uses the touch screen as a substitute for buttons or a d-pad inevitably wastes a significant portion of the screen on the interface for that, probably nullifying any advantage the iPhone has in terms of screen resolution.

As you can see, "AWESOME SIMPLY THE BEST" is hardly "so wrong"; I'd say he's DEFINITELY right overall. The PSP, unsurprisingly since it was designed to be a gaming platform, is a better platform for games. Hard to imagine, I know.

That said, I don't have a PSP, and I don't see myself buying one anytime soon; the iPhone has combined my iPod, cellphone, handheld gaming console, and to some extent my laptop into a single wonderful device. While there are individual devices that perform all of those functions better, the iPhone does a pretty good job at all of them and I couldn't be happier.

@AWESOME SIMPLY THE BEST: PSP hardware more superior??? LOL. You are so wrong, have a look at this – http://gadgets.boingboing.net/pspcomparetbl.png

the ipod touch and iphone will not come/can't reach psp standards..

its the hardware…psp is far superior.
so for the people who believe that in time (as games get bigger, pref in size)
….doesn't mean it will have graphics, on par with the psp.
it's just impossible. its like asking nintendo gameboy adv to play N64 games…