I've never really been one for graphics, if it looks ok, so what? There is no need to pay $200 because a mans face becomes less pixelated.
For me the psp has many features that make it superior. Homebrew for one, plus the ability to store and play music and video files.
The DS does have some desireable features aswell, i.e. the dual screens. And touch screen. And you get to relive all the N64 and Super Nintendo games, portably and with better quality.
It all comes down to choice. Personally I prefer the PSP for its media ability. But the DS does not linger fer behind the PSP, due to its appeal to people who owned previous nintendo consoles, and prefer more "child like" gameplay.