Ipod touch has wifi too.
there are issues between the two though.
Ipod touch, of course you have limited amounts of space you can have on it, it currently only comes in 8gb and 16gb models.
With the PSP you can always upgrade how much space is in it with an SD(HC) card.
I'm going to buy a ipod touch because it is what I need, i've decided on the 8gb model to save money.
Keep in mind the ipod touch wasn't meant for gaming, and you can't buy movies for it etc. like you can the PSP.
Depends on what you want.
Keep in mind the price differences, a PSP costs less than $200 these days, the cheapest Ipod touch is $300.
(btw, yes the internet is free)
The more I read I'm comming across the pros and cons of both.
PSP has a much smaller battery life than the Ipod Touch, depending on what you're doing, but the Ipod touch has a 4 hour battery life while surfing the internet, 5 hours video, and up to 22 hours only audio playback.
Ipod touch obviously is a touch screen and a full easy to use UI, whereas the PSP.. is not, but then again the PSP wasn't made for the same purposes as the Ipod Touch, bot are completely different, and are not even meant to be compared.
Question is, how much money do you have, and what purpose will buying a PSP serve you?
As they say in Economics, what utility does it have to you?