Well obviously better graphics.
Better speakers (louder, less tinny, and with more base).
I want them to make a bunch of 2D games for it, but of course better graphics would mean even less 2D games since that's what happened going from GBA to DS
Keep the clamshell design.
Make it so the touch screen can detect multiple touches at the same time.
Include an analog stick just above the D Pad. (I like the idea of the groove in the top clamshell for the analog stick to tuck into when it's closed.)
Built in rumble would be nice.
I could take or leave a camera.
All wi-fi games should use the microphone for optional in game chat.
Make the hinge on the clamshell a little tighter, so the screen doesn't flip to different positions when I do a slide in Mario Kart.
I really don't want them to bother with multimedia nonsense. I hate watching videos on a small screen and I have an iPod for music. It will only mean worse hardware, because they'll have to sacrifice something or raise the price. Video game systems should be primarily for video games. PSP's main failure is that their main selling point is multimedia, not great games.
And the last one Nintendo won't do, at least on purpose, but I'd like it to be designed in a way that makes things easy on homebrew developers and modders.
Also, that virtual bottom screen for the buttons, that someone mentioned, is one of the worst ideas I've ever heard. It would be horrible to not get any tactile feedback from the controls. You'd constantly have to look at your hands to make sure you were touching the buttons and would feel really detached from gameplay.
I also don't care for those mock-ups that were posted. Much too segmented looking (IE ugly) and I'd rather a portable system be thinner than not as wide. My pockets are long so, they fit the DS fine, but I don't want them to bulge more than necessary.