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At tonight's Microsoft Pre-E3 event, Microsoft Vice President J. Allard confirmed integration between the Sony PSP and Microsoft's upcoming console, the Xbox 360. Integration details are not yet available, but it is known that the 360 is both Wi-Fi and USB 2.0 capable. The Xbox 360 is set for a worldwide release before the end of the year. Check out Engadget for a photo from the event, and stay tuned to PSPworld for further details.
Update: The integration will involve the Xbox 360 leveraging it's media interface to stream media (music and pictures?) from the PSP via USB.
DannyMac: WTF? Is Sony going to bend over and take this? I do admit it's cool, but the XBox 360 is a direct competitor to the PS3. It's like playing Real's songs from their music store on the iPod.
Charles Starrett: True, but I'd say there is a good chance the 360 is accessing it like a hard drive, which is something that Sony would have no control over. Still, very cool news - P.S. It's interfacing with the iPod as well ;)
DannyMac: Haha! Well the iPod integration isn't that weird, but still the PSP integration is. It's like Bill Gates flipping off Sony!
xay: and the battle goes on and on... Sony vs. Microsoft... lolz
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