LeKnight said:
dual touch screens/control (front and back)
dual analogue sticks
crazy processing power
O-LED screen (720p)
more ports than the deathstar (wifi, bluetooth, multiple cards (including sim for mobile interweb), usb, .bla bla...
front and back cameras
3 axis gyroscope (motion control)
and tons of other shit, not to mention the ps network with all their products online.
All stuff kids don't give a fuck about, it's all about the games and what their mates have.
Also I wouldn't exactly use the PSN as a selling point right now :>
Another point for the iOS route - kids love it, and you don't have to attach a credit card, you can buy iTunes Store Credit at most dairies and shit. $20 credit buys heaps of iPhone games, $20 doesn't buy many DS or PSP games.