it's just a rumor.. dsi is still new in the market, so they wouldn't be rushing into this. Of course, they will be either an upgrade or a new console by ninty in few years time and this could be it, just like the rumors on 'new' console before that turns to be an upgrade which is DSi.

However if it turns out true, I don't think can be compared to ps3 because graphic as good as ps3 would be too much for portable gaming and the battery. But who knows, there might be new technology

But Ninty is always more onto the simpler, cuter side of graphics.. because majority of DS intereactive games are for girls, especially little girls where PSP is more towards the mature players so I don't think there would be a huge difference in update later on.