The system has a pop up 3.8" screen with the buttons underneath it, similar to a Sidekick. It's 43% lighter than the PSP-3000, has 16GB of flash memory, bluetooth , and no UMD drive.
Scans from the next issue of Famitsu discuss the project with lots of whited out text. One thing for sure is the countdown has Big Boss now and will show Raiden later.
The domestic line up of able PsOne games is thin, but it appears that Sony will fill up the store with heavy hitters like Metal Gear Solid and Resident Evil: Director's Cut.