I'd consider upgrading if the price was reasonable (read, not an increase over the current unit's price), and if they are still hackable. I LOVE using my PSP to play emulators and such on, as well as loading legit PSP iso's onto my memory stick for some non-stop gaming action.
I don't think I'd trade that convenience for a thinner machine and marginally longer battery life....
Oh, the TV-out would be pretty cool though, would make it a much more useful portable media device as you could then watch shows on a bigger display....