The PSP may be more powerful, but it's games are mostly just graphically inferior versions of console games, with obvious exceptions like Lumines. It has proven to be rather lack-luster when it comes to FPS controls, too. One good thing, though, is the fighting games. They've been handled a lot better on PSP than on the DS.
The DS, though, has pretty much every other genre in the pocket. Meteos is its answer to PSP's Lumines, and it has a bunch of other good puzzle games like Tetris, Pokemon Trozei, etc. Rayman, Mario 64, and New Super Mario brothers are awesome, and it has games that jsut wouldn't work as well on the PSP, like Phoenix Wright and the Feel the Magic games.
Plus, the DS has possibly the first competitive handheld First Person Shooter in Metroid Prime Hunters. And the DS can play all GBA games, which, kind of rocks.
Of course, I may be biased as my PSP has a freaking dead pixel.