Apparently, Ain’t It Cool News has confirmed it. However, I find their source, or lack thereof, to make the idea of a PSP re-release slightly suspect. Regardless, here is the quote:
Seems Sony’s current internal plans call for a release of a refitted PSP around Christmas this year. The device will, indeed, be streamlined (thinner), lighter, boast 4 gigs of memory and a camera. Proteus indicated Sony is having a hell of a time with Playstation 3 on several fronts (between PS3’s Cell processor and its built-in Blu-ray DVD, cost effectiveness has pretty much gone out the window). Seems the ever-phantasmic PS3 may well be delayed until next year, with Sony’s reworked PSP being positioned as a lead-in to its release (in the same way Nintendo’s release of the oh-so-sexy DS Lite heralds the coming of Revolution).
Please, someone call ”Bullshit.”