While this does look awesome, the PSP is going to kill it. I guess we know the real reason why MS was badmouthing the PSP now though.
I'd consider getting one of these if it supported Pocket PC apps or used the Palm OS system, but it doesn't look to be very "PDA-friendly" in its design.
BTW, I have a Tapwave Zodiac 2. It's a very nice PDA, with a great layout of the analog stick/buttons to make it pefect for gaming. But no game comes anywhere close to looking as good as those Gizmondo games do. I bought the Zodiac for emulation, however, and the emus available are coming along very nicely. Plus the Zodiac is small and quite slim, with two ports for SD cards, so you can have up to 2gb worth of data in your system at one time. It's great for watching movies, listening to music, and playing some old-school games; this was my alternative to getting an iPod.
The Gizmondo seems to be more of a straight-out gaming system than a PDA/gaming system hybrid (so the lack of support on the Zodiac means nothing as there's plenty of Palm OS apps out there you can use), and while it looks awesome, for $400, it's not worth the money since it will get killed by the DS and the PSP.