Exciting news indeed for Sony PSP fans and particularly those that are considering the use of the device in a educational context.
At the Playstation Business Briefing in Tokyo yesterday it was announced that the Sony PSP which has already shipped over 15 million units will soon feature add-ons including a camera for stills and video (including video chat over WiFi as well as augmented reality games such as Eye-Toy), a GPS receiver and software support for Voice over IP (VoIP) for free telephone and video calls and the ability to run Flash applications.
All this at the same time as announcing a price reduction to US$199 (£115).

http://www.gamespot.com/news/6145973.html
TOKYO--Today at the 2006 PlayStation Business Briefing in Tokyo, Sony Computer president Ken Kutaragi took the stage to lay out his vision for, among other things, the future of the PSP. He said that, beginning in October, the portable would support video voice-over IP via the new PSP-300 silver digital camera add-on, which will attach to the top of the PSP unit. Kutaragi showed a slide that the camera would support a video chat via a format he called "motion jpeg" and an EyeToy game to be released in September. No price was mentioned.
[UPDATE2] The SCE president also announced another new peripheral, the PSP-290 GPS receiver. According to a slide shown at the event, the PSP-290 will also attach to the top of the device and be silver in color. It will also be available in October, though no price was mentioned.
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http://psp.ign.com/articles/696/696079p1.html
Some upcoming features won't require a hardware investment. Macromedia Flash 6.0 compatibility and RSS Channel support will be made available via a network update later this Spring. The RSS channel support will allow for playback and saving of internet radio and will initially support just audio. The Flash upgrade will let games include Flash-based content.
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The Flash capability is significant because it may mean that educational web-based content that uses Flash may now be fully useable using the Sony PSP web-browser.