I just wanted to make some comments about cartriges.
AFAIK, in the early-PSX era there were maybe five big complaints about carts. I'll comment on each of them, in the seemingly approximate order of the complaint size.
1: Their price.
2: Storage capacity.
3: Nintendo's unquestionable control.
4: Shortages.
5: Slow manufacturing times.
1: Their price.
In the NES/SNES/N64 days, a cartrige cost something like $20-30, in hardware costs alone. If you tack on a $5 royalty profit for Nintendo (or Sega, or any other hardware maker), the cost of a cart itself was $25-35. Compact Disks cost around $1-3. Early CD systems failed because they were expensive add-ons, but with the PSX, Sony lost money on the hardware, and charged higher royalties to make up for it. Sony's royalties were supposedly something like $10-15 per-game. Sony made twice as much in royalties per-game as Nintendo (although half of it went to the money-losing hardware), publishers hoping for a million-seller only needed to invest $15 million, instead of $35 million, and there was still enough money left over for CD-based games to be $20 cheaper than cart-based games, at the consumer's end.
2: Storage capacity.
Late-SNES and early N64 games were 32 megabits (4 megabytes). Developers constantly had to be aware of size limits, because a bigger cart cost more, but you couldn't reduce the quality on things because your game HAS to look better than the next guy's game. CDs offered 650 megabytes (which was eventually bumped up to 700MB). They didn't even want to bother with "megabit" terms anymore.
3: Nintendo's unquestionable control.
It was believed that as long as Nintendo made the carts, Nintendo was absolutely in charge, and Nintendo had the ability to censor game makers, and suggest ways they could "improve" their games.
4: Shortages.
Go make complaint numbers 1, 2, and 3 even worse.
5: Slow manufacturing times.
If you wanted to test a new prototype of a nearly-completed game, you had to place an order for a cart, and wait several months (by which time your prototype isn't current anymore). Once your game was done and you placed your entire $35 million order, you had to wait on pins and needles for several months before you could even hope for a return on your investment. Although it was softened a bit by knowing that all of your competetors (except the ones making CD-based games) were having to wait just as long.
Now here's how they relate to today, and the Nintendo DS.
1: Their price.
Nintendo has been pushing to lower the costs on GameBoy games for a long time, since people won't pay as much for a "technologically inferior" game, even if it's portable. As I've heard it, GBA royalties are in the $10-20 range. Similar to modern disk-based console royalties. Nintendo makes slim money on the royalties (the GBA isn't as much of a moneymaker compared to the GameCube as everyone seems to think it is), but doesn't lose money on the hardware. The DS cards are supposed to be even cheaper than the GBA's carts. I'd guess it's gonna be something like $5 for the hardware, with a max of $10 for the total royalty rate (although I have no inside info on this, it's just a guess based on what others have been saying).
Special note:
Development costs.
The 16-bit styled GBA games are regularly cheaper than disk-based console games because their production values are much smaller. Of course, when a CD-based game stops selling, and the publisher thinks it's development costs have all been paid off, the publisher can negotiate for a lower royalty, and try to flog the game out again as a $20 "greatest hits" game. But that's just a short-term gain thing, and is damaging to the finances of a console. Unless the PSP turns into a PSOne port-machine, the DS will have a major edge in this area.
2: Storage capacity.
The starting size on the DS cards is supposed to be 1 gigabit (128 megabytes). That's bigger than any N64 cart has ever been. That's bigger than Resident Evil 2-64. Final Fantasy 7 itself, without any compression, was only 185 megabytes. It was the 1.5 gigabytes worth of FMV that took up three CDs. We're getting pretty close to the point where all that you need more size for is more FMV. Well, there are lots of modern games that are bigger (even without FMV), but the DS can't compete with those games in more ways than the storage size. One gigabit is BIG for what the DS can do. And Majesco can fit a half-hour Pokemon episode onto a cart that's a fraction of the size. Sure, it's not two hours of DVD-quality video, but it'll have to do.
3: Nintendo's unquestionable control.
Anyone can make a CD. But Sony's iron grip on the console industry is debatably tighter than Nintendo's grip ever was. The only benefit with CDs is rampant piracy. I guess the third parties got exactly what they wanted. It just turned out that they didn't really want what it was that they thought they wanted.
4: Shortages.
This could bite Nintendo. No real way to know. Probably won't bite the PSP. Unless there's a run on Memory Sticks.
5: Slow manufacturing times.
Development kits don't come with copy-protection systems. So if you want a prototype for a CD-based system, you just make a CDR in a few minutes. The DS cards simply can't be that fast, but supposedly they're pretty fast by cart standards. If it's not slow enough to be "a problem", then... it shouldn't be a problem, right?
Now, add to this the new complaints about DVD players sucking back the power when used with batteries, and about it not being a good idea to move or jostle them while they're operating.