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NDS wins if you're simply buying it as a casual portable game console. Casual gaming library filled with simple games you can easily start playing for short bursts at a time.
But PSP is for people who want to do more stuff on their portable console. Like watching high quality movies, play old PS1 games, and generally prefer a more mature variety of games. Put a 4g or 8g memory card in a PSP and it's literally a portable home-entertainment system. The graphics are just that good.
And recently, PSP has been getting a lot of top original games, not just ports. And I definitely can't wait for the NA release of Crisis Core.
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