Apparently the next generation PSP is roughly the same size as the PSP-3000 and is being demonstrated with a number of first-party titles.
The big news is how the device controls however. According to Eurogamer - and a number of "development sources" - the device has touch controls on the back of the unit. We're trying to get a grasp on how this would actually work but we're struggling. If anyone has any examples of any consumer electronics devices where there's a touch sensor on the back of the unit, please drop a link in the comments.
Apparently the device is still some way off - Eurogamer's sources are conflicting, with one citing a release at the end of 2011 and the other assuming it's still some years away. According to the report, Sony were planning a physical storage medium for the device but, after developer feedback, has decided to go with PSPgo-esque flash memory.
Don't expect any more on this rumour for a while. Sony "does not comment on rumour and speculation" remember.