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The GP2X hardware might be improved gradually but afaik nothing concrete is planned. The hardware design could be better but it's actually pretty nice. The SD cards don't stick out and the standard AA batteries are an ADVANTAGE, damnit! Why does nobody get this?! Proprietary batteries are stupid shit! It's much nicer to have standard slots that you can put anything into. Rechargables of different kinds, normal batteries in an emergency situation, even cells with an actual USB plug on them or whatever insane awesome madness they come up with next. You can get different capacities, there are 2700 maH rechargables available. And if your cells are empty, you can simply pop in another pair. Try to do that with a DS or PSP on a long trip!Tell you the truth it was in someones sig here. I forget their name but I know they live in Germany. I had already heard good things about the GP2X when I searching for emulators for the DS.
You talking about me?
The 2X is quite a nice device. It's great for movies, music and emulators. I heard the PS1 emulator has become quite usable but I didn't try it, yet. I think N64 doesn't exist, yet, but GBA and Genesis are especially impressive. Where the 2X is lacking a bit is original homebrew games (weird but sadly true). It has a few commercial games I consider worth buying, though (Payback, Vektar). The DS beats it when it comes to internet connectivity, reading comics and original homebrew.
Pretty much all the available software is listed at http://archive.gp2x.de/cgi-bin/cfiles.cgi .
The main problem with the 2X is the controls. The buttons could have more resistance or be further apart but that's ok. The stick is a real problem, though. It was really bad with the first revision stick cap. With the new cap it's better but still not comparable to the comfort of a real d-pad. If you can, get a 2X premodded with a d-pad. I think http://www.gp2x.de/shop/index.php sells them from time to time but unfortunately they are made by hand so they are seldom available.
I heard that there will be some new models of the GP2X/a new Gamepark Holding handheld released sometime. Is this true? The mainb problem I see with the GP2X is really the hardware design, the fact that the memory card sticks out and it uses AAs bothers me a bit and I can wait for that.
So, is it better/worse than the PSP? Depends on your taste I guess. Seems like the emulation capabilities are about the same, the PSP obviously has the advantage of the official Sony PS1 emulator but I doubt it has as many emulators for the more obscure devices as the GP2X has (don't know, though). The GP2X has the definite advantages of using SD cards and AA batteries. It doesn't have wireless connectivity, unfortunately. It does have an adapter for TV out available and a cradle to connect external USB peripherals to pimp it into being a real home console. This also probably gets around the controls problem though it makes it less of a handheld. A definite advantage is that it's easy to develop for and has a nice community but that applies mainly to developers. The screen has the right dimensions for most emulated machines (unlike the PSP screen with it's stupid ratio) and it doesn't have the annoying ghosting that turns me off every time I try to play with a PSP.
I hope this helps you to make a decision.