yes it sometimes is hard to chose!
Ipod- if you get the ipod, well you don't have to spend that much more cuz you can get the music Illegally (NOT SAYING YOU SHOULD) or through iTunes and it will still be cheaper than 1 game for the PSP.
PSP- well here is exactly the same but now that you have the PSP you will want to get some games from time to time... and thats
$40 a
POP!!
(
I got the Ipod, Can't live without it!)