Well, I can't really answer the question the way i'd like to or I'd get banned. But let me just say this... there are certain functionalities you could lose by upgrading your PSP... If for whatever reason you had to upgrade, you'd get remote play, which means you can access your PS3 over a netowrk, or the internet. You can't play games yet, but you can stream your music and videos. If you're above average as far as computer knowledge goes, you can set up a media server from your PC and acess it through the PS3 on your PSP via remote play.
2. Depends on your taste of games, there are two excellent Burnout games for driving games, as far as fighting goes, nothing beats Tekken Dark Resurrection, you have RPGs such as FF:War of The Lions, Disgaea, you have action games like Metal Gear Portable Ops, or Killzone liberation, platformers like Ratchet and Clank, Daxter, Megaman Maverick Hunter X, meganman powered up. Puzzle games like Lumines 1 & 2. and some oddball games(which are awesome) like Exit, WTF, and Crush. There are tons of great games, but those are a few that come to mind.
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