The PSP can play mp3 files natively, that means you can just drag mp3s onto the memory stick and go. But the 32 meg stick it comes with is obviously not enough to get anyone to want to use it that way.
But the games come on Sony’s new Universal Media Disks (UMDs). Sony claims this is an “open” standard, so that other companies can release movies and such on their own. All that needs to happen now is for some company to release a commercial UMD media writer. At anything less than $50, a writer would (I imagine) skyrocket sales of the PSP for those of us who want a gaming system that could also, potentially, play our mp3 collection.