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Here’s my list of several things that Sony needs to do to make the PSP the must-have gadget for a while:

1. UMD burner—Sony needs to release a consumer level UMD burner for burning content to the little disks that the PSP accepts. The Memory Sticks are good (in that they are better than nothing), but they cost too much and don’t hold enough for all the media content I want to carry around on this device. Having a 1.8GB burnable disk would be nice for watching MPEG4 content on the PSP. Of course, in the meantime, I’m compressing my shows to my Mac, so I can swap them out on my Memory Stick. Reason Sony may not release a UMD burner: this could potentially open the PSP up to piracy. Why I think they will: they did it with MiniDiscs.
2. Cheaper & Larger Capacity Memory Sticks—If Sony doesn’t release UMB burners, then they need to make larger capacity, less expensive Memory Sticks. This won’t happen, which is all the more reason for them to release UMD burners (Mac compatible, please!).
3. Web Browser / Open Up the Web Access—Sure, some people have already figured out how to get a browser working on the PSP, but I think Sony would be making a smart move if they open up the wireless capabilities of this device with either a downloaded additional browser / email client in the firmware, a downloadable browser you can install on your Memory Stick, or a UMD disk featuring a PDA set of applications. I give something along these lines a 50 / 50 chance of happening. It would also be nice if the games could be played over the internet, not just over ad hock networks. I don’t see why they couldn’t, but so far none of the ones that I’ve bought that are internet capable are quite this type of internet capable.
4. Some sort of Video Out—I don’t know if this is possible with the one USB port, but a video out of some sort would be nice for, for example, watching Spiderman 2 or any other movie I buy for the PSP on a larger screen.
5. VOIP—File this under it’ll never happen (at least not straight from Sony), but some sort of VOIP solution for the PSP would be cool.

I don’t think 5 has a chance. 4 is very iffy. But 1-3 should be implemented ASAP.

Oh, and it would also be nice if Sony included a USB cable with the PSP for computer attaching / syncing.