Mixing the two is already done on Xbox 360 and PS3, and nobody seems to be confused. The PSP isn't any different. It'll be like Burnout Paradise, Warhawk, or SOCOM on PS3 - you can buy these games in disk form, or you can download them off of PSN. It's you choice, just like PC users can buy Valve games at retail or over Steam.
Yeah but all those games kinda flopped, and that's just them trying to grab more revenue by charging full retail prices for games you can find for $19 on Amazon. It's not the sort of ideal solution it's made out to be. When they put big-name titles on it first day, that's when I'll turn my head. But otherwise it's just a revenue grab. And Steam is a bad example. Piracy runs rampant on the PC. Steam is more of a defensive measure against piracy than a future model for retail. And it's not like the PC market is going really well enough that console manufacturers who make their money off consoles (Oh I'm sorry, that's just Nintendo, my bad) and licensing fees should emulate their defensive measures against piracy as a model for revenue. Another thing is that just because they are DOING these things, doesn't mean that A) it's working and B) people like it.
UMD is fine as a storage media. It failed as a platform to sell movies on, but that doesn't have anything to do with the media itself. Of all the complaints about the PSP, reliability of the disc-reading mechanism isn't one that I've ever heard. The only real knock against the UMD discs is that they're slower to access than cartridges, but then what isn't?
Well, like others said, it drains the battery, so not only is it slow to load that time playing nothing it drains the battery faster so you don't get to do much playing when you actually are. The plastic shell case means cleaning the disc (should you have to) is a huge hassle. These may not be issues with you, but they do detract from the product and others find issue with it as well. That's why the DS is stomping its guts out on the technical level. And slower access is actually the CRUCIAL thing with a handheld, that makes all these other complaints seem niggling by comparison. When it takes a whole minute just to load a game on PSP, while a guy with a DS is playing in seconds, the only thing blocking him being the corporate logo hell he might have to sit through, it's pretty damning. And I understand your desire to keep your things in pristine shape, but that shouldn't even be an issue with portables. Because they are, you know, portables, they should be able to take a hit. The games have to be able to survive being left out on a desk or a dusty floor. DS card and cartridges in general are great at this, where as discs are really bad for this.
I don't think they're locked into any particular graphical spec. As long as there's a marked improvement over the original PSP, I think most people will be happy. They just need to really decide what their goal is going to be with the PSP2, and match the graphics accordingly. They really need to offer a less strictly console-like experience with the PSP2.
No way. Wii games, mostly from Nintendo and especially Mario Galaxy, show a marked improvement over GameCube games. That doesn't stop people from ragging on it all day. If the PSP2 doesn't set a new benchmark for graphics, they can kiss their hardcore set goodbye, as that was the only thing selling the PSP for a long time. And I'm not sure what you mean by "console-like experiences." A lot of DS games have the same or better-than console-like experiences, particularly the strong gameplay-focus that seems missing from the console games as a whole. Heck some of the DS's games even used to BE console games, like Chrono Trigger. If you just mean graphics, well, like I said above.
I think my biggest problem with the PSP is that it was severely casual focused and tried to hide it with GT Mobile screens. And by casual focused, I mean even worse than the dread "Nintendo non-gamer focus." I mean they made their portable with movie-playing, MP3 capability, and fashion statement in mind. They allowed, nay, ENCOURAGED their customers to use it as an MP3 player, or a media thing. Even if the accusation of Nintendo making and selling casual games were true, at least "casual games" are still "games" that people buy and play, thus generating game-related revenue, which turns to profit from game-playing capabilities. Game studios and publishers get ZERO from somebody using a PSP as an MP3 player. This is why you don't see much enthusiasm regarding the PSP, really. A significant chunk of their market aren't even gamers at all, casual or hardcore. And only Sony benefits from that.
And as for backwards compatibility, the DS sold about 90 million of DS Pahts and Lites, both of which have GBA backwards compatibility. I'd say they have the majority of people who care about it covered. But it still is an important thing to have for your early adopters. I know a DS2 will play DS1 games. GBC or GBA games on download won't be so wrong, because by the time a DS2 comes out, GBA games will have already been discontinued from stores for a good 3 or 4 years. But the previous generations games must be backwards compatible, mainly because it's not like they torch the land of the previous consoles games the second they arrive. Backwards compatibility allows for customer satisfaction and generates revenue for the company by still having their old games still be viable products.
The only reason I could see Sony not doing it is because even they think their PSP games are unpopular and nobody would care about playing them again.