As much as I love the DS, I'd rather that Nintendo spend it's R&D time on the next Game Boy (GBE, whatever)... , I think it'll be important to come out with a system much more powerful than the PSP as soon as the PSP starts gaining serious steam (maybe an announcement 18 months from now or so?). I think you pose a great question by starting this thread (I'd serious be interested in what people who dislike the DS's design would prefer), but I really hope Nintendo just lets the DS peter out after a couple years, as was the initial plan.
Brief OT aside on the GBE's design: Because of the DS's success, I wonder whether some of its features will be seen in the next GameBoy. It seems like a touch screen would almost need to be par for the course at this point, given how useful it is for so many portable games.
Regarding DS: Fuck redesigning it. I hate buying the same handheld again just to avoid hand cramps. I think the DS is functional enough as it is. It's not beautiful, but I don't think it's an eyesore, either.
Although, I think they could probably stand to make the face buttons a little bit larger in a stealth chasis update, without having to rebrand the whole thing as DSSP. I don't really mind the corners unless the game relies too heavily on the shoulder buttons, then they're a pain.