if im not mistaken isnt the processor speed and video capabilitys better than PS2? thats atleast what i always hear... just never seen... 
You know, the internet is a place for more than just rampant speculation. It also has plenty of factual websites full of actual information and not just rumours. Take for instance, Wikipedia:
Playstation (PSX and PSone):
http://en.wikipedia.org/wiki/Playstation#SpecificationsMIPS R3000A-compatible (R3051) 32bit RISC chip running at 33.8688 MHz
Playstation Portable:
http://en.wikipedia.org/wiki/PSP#Technical_specificationsThe PlayStation Portable's CPU is a MIPS 4KE or 24KE series (32-bit MIPS32R2 architecture) CPU, split into two cores each operating between 1 and 333 MHz. During the GDC, Sony revealed that it has currently capped the PSP's CPU at 222, apparently in an attempt to lengthen battery life.
The independent 166 MHz 90 nm graphics chip sports 2MB embedded memory and through its 512 bit interface it provides hardware polygon and NURBS rendering, hardware directional lighting, clipping, environment projection and texture mapping, texture compression and tessellation, fogging, alpha blending, depth and stencil tests, vertex blending for morphing effects, and dithering, all in 16 or 32 bit colour, along with handling image output. Specifications state that the PSP is capable of rendering 33 million flat-shaded polygons per second, with a 664 million pixel per second fill rate. [5]
Unlike Sony's PlayStation 2 console, the GPU (PS2 Vector Unit equivalent) is not programmable, meaning that many effects that the PS2 can resolve in hardware must be implemented in software on the PSP. Nonetheless, the implementation of a GPU in the PSP is still a significant technological advance, in that it implements robust hardware-rendering for 3D graphics in the handheld market. The PSP was preceded in this regard by Nokia's N-Gage in 2003, and the Nintendo DS in 2004.
Playstation 2:
http://en.wikipedia.org/wiki/Playstation_2#Technical_specificationsCPU: 128 bit "Emotion Engine" clocked at 294 MHz (later versions 299 MHz), 10.5 million transistors
Main processor: MIPS R5900 CPU core, 64 bit
Graphics: "Graphics Synthesizer" clocked at 147 MHz
Summary:
PSone: R3000 family, 34MHz.
PSP: R4000 family, 222MHz Max, 166MHz graphics processor with no hardware graphics programmability.
PS2: R5000 family, 300MHz, 150MHz graphics processor graphics with full hardware graphics programmability (ie: full stencil/vertex/shader scripting, etc).
In real-world "to the human eye" terms, this puts the PS2 slightly ahead of the PSP in terms of graphics-crunching and display quality. It can do all the tasty hardware eye-candy stuff that gamers demand, and has slightly more poly-crunching grunt to feed it via the main processor.