The PLAYSTATION 3 launch is getting closer and closer, and PSP fans are getting anxious. There's potential for a lot of great things to be done with the PSP-PS3 connectivity. Remote Play is one example of the connectivity at play: you'll be able to stream media from your PS3 to your PSP, so you see videos, music and images from your PS3's hard drive. However, according to PSX Extreme, you won't be able to stream copyright-protected content, such as disc media. So, you won't be able to stream the newest Blu-Ray movie from your PS3 to your PSP. You won't be able to stream any of your DVDs. How will purchased music work?
However, all the media that's stored on the PLAYSTATION 3's drive should stream to the PSP reasonably well, and the PS3 supports quite a number of formats: 1UP reports that the PS3 will support: MPEG-1, MPEG-2 (PS, TS), MPEG-4 SP, and MPEG-4 AVC/H.264. Audio formats include: ATRAC, AAC, MP3, and WAV. The PS3 is clearly a lot more flexible with video formats than the PSP, and unlike the PSP, will support videos with resolutions as high as 1920x1080 (according to PS3 Fanboy).
PS3 Fanboy also reports that future firmware upgrades may allow you to play PS3 content from your PSP, as previously theorized. While this is an exciting prospect, I hope that the immediate future brings us unrestricted video on the PSP, similar to what the PS3 has (having 480x272 video would be very nice indeed!).