According to reports, the early version of the PSP2 shown off to developers will be comparable to the Xbox 360 in processing power. The one hardware statistic cited was that the PSP2 will feature 1 GB of RAM, compared to the 64 MB of RAM for the standard PSP or the 512 MB of RAM that the Xbox 360 has.
Other sources suggest that the PSP2 will not have a UMD drive, and while Sony may still be considering what the final storage solution will be one source believes it will be on a Memory Stick. Two form-factors for the PSP2 were shown off, looking like the PSPgo and regular PSP respectively, though Sony apparently told attendees that they have not yet settled on the final design for the system.
Source: Kotaku
