PSP Redux?

According to a post on Ain’t It Cool News of all places, Sony may try to take the fight harder to the DS and other non-gaming devices by releasing a slimmer, high capacity, more functional PSP by Winter 06.
Here’s the relevant quote from the post:

Seems Sony’s current internal plans call for a release of a refitted PSP around Christmas this year. The device will, indeed, be streamlined (thinner), lighter, boast 4 gigs of memory and a camera. Proteus indicated Sony is having a hell of a time with PlayStation 3 on several fronts (between PS3’s Cell processor and its built-in Blu-ray DVD, cost effectiveness has pretty much gone out the window). Seems the ever-phantasmic PS3 may well be delayed until next year, with Sony’s reworked PSP being positioned as a lead-in to its release (in the same way Nintendo’s release of the oh-so-sexy DS Lite heralds the coming of Revolution).

Better PSP revealed at E3 could be just the sort of distraction Sony needs if the PS3 delay ends up being until 07. Its cold comfort, but if Sony does in fact rededicate efforts toward the PSP hardware maybe more software will follow.