This isn't really a news update, so much as it is just my personal prediction of what and how I think the new PSP should look like, and how it'll incorporate the second analog stick. I recently saw a Photoshop online and the designer of said Photoshop placed the analog nubs of the PSP at the very bottom, below the screen, which made absolutely no functional or aesthetic sense. They were placed where the Home and Start buttons can be found on the current PSP, so go pick yours up by holding your thumbs only there, and you'll realize it's an awkward placement, as the PSP's screen will no doubt be in the way and your thumbs will obscure parts of it occasionally. Never mind the fact that your nails (long or short) will, overtime, leave scratches all over the bottom of the screen in that configuration.
So I fired up Photoshop (okay, it was MS Paint) and did one tiny little chop job, and what came out was something beyond obvious, which you can see in the pic. The second analog nub was added as a mirror placement to the original below the d-pad. The PSP already has the space for the second analog, it just needs to be used, plain and simple. The other configuration I can imagine seeing is the D-pad and analog nub switching positions, seeing as how most people prefer analog controls, anyways. Now, our other wish is to have a tilting and sliding screen, the tilting to be used in order to minimize glare at certain angles and make it easier to view the screen (similar to the upcoming Palm Pre).
We expect the width of the console to remain largely the same, unless Sony makes the D-pad and the action buttons smaller in order to decrease horizontal width a bit. Additionally, we're hoping for an even slimmer package, and hope Sony can trim away the excess plastic; especially since the biggest rumor for the new PSP is that it won't rely on a media drive anywhere, which should not only help to make this portable much slimmer, but also much lighter. That should help make the unit much more pocket friendly than the existing model.
We're also expecting updates to the LCD screen, which in the PSP3000 system has ups and downs, and not everybody is happy with. Perhaps a touchscreen ability for the new screen is also a possibility, considering how everything these days has a touchscreen, with an on-screen QWERTY keyboard for when you're online, chatting, etc. In addition to support for larger memory sticks, enhanced hardware specs, backwards compatibility with PSP and PSOne games, enhanced network/internet capabilities, and maybe even a few smartphone-esque features here and there. Now, while there are some rumors that believe the new PSP can also be a phone, we doubt it. The PSP is a gaming machine first and foremost, and to have it also work as a phone could make for an astronomical price that Sony will not want to risk having.
Of course, don't expect to hear anything concrete regarding the new PSP until E3 rolls around in about 40 days.