i dont think the PSP does much, just receives the internet connection packets.
the ps3 processes the game data, then converts to data packets and pushes it to the psp.
then the psp just display the data received from the ps3.

dont be too happy about this,though.
it relies heavily on your internet connection.
got a 1Mbps line?
lol..forget it
even remote play accessing the store through the ps3 will lag like crazy.

cant remember how much the cable costs, but it's damn short.
really damn short.
when played on tv it retains it's 480p picture, so it's not that bad..just not very nice to look at as it wont completely cover the whole screen

I hope it doesnt stay exclusive.
Kingdom Hearts 3D oso on 3ds...hope they will somehow port it for Vita too.

why US cheaper than Japan set

personal comment on the new vita's:
remote play - no ps3 games supported at the moment
screen burn - yes, only appear when no light environment at blank screen
lock screen response - slow, delay as much as 3-4sec after pressing the ps button
multitasking - some apps yes, but some will turn off automatically when other apps is operating (games tc.)
system crash - possible, especially the touch screen not working (solution: system reset)
touch screen - not as good as ios devices. Challenging dragging / slide touch, but overall it works
dual thumb sticks - works well, although the physical stick range of motion is very limited
proprietary memory card - is a must to play games
web browser - fail, poor performance and bad UI