Sony planning new PlayStation Portable with a 50GB hard drive?

Our sibling site Joystiq just scored some scoopage about Sony's plans for a second generation PlayStation Portable that will come with a built-in 50GB. According to an analyst speaking at a game conference they were attending yesterday, Sony wouldn't start mass production of this supposed 2G PSP until next year, but could have a prototype to show off by the end of this year. Adding an internal hard drive would force us to take their boasts about the PSP being an iPod competitor slightly more seriously, but there are a few big issues they'll have to work out, like battery life
(the PSP's battery runs out quickly enough as it is), size (where are they going to put the damn thing?), price (can they really get away charging more than they are now?), and reliability (they'll have to make the drive rugged enough to withstand the PSP being accidentally dropped).