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After much rumour and speculation, Sony has unveiled the new PSP, It’s actually codenamed NGP and will revolve around five key concepts: Revolutionary User Interface, Social Connectivity, Location-based Entertainment, Converging Real and Virtual (augmented) Reality. It will be compatible with the PlayStation Suite and is backwards-compatible with downloadable PSP games and content from Sony’s PlayStation Store.

The PSP’s replacement has a five-inch, 16 million colour 960×544 OLED touchscreen, twin cameras, twin speakers and a microphone. There are also twin analogue sticks and a ridiculously powerful quad-core processor based on the ARM Cortex A9. Expect four to five hours from the battery.

Games will come on “new media,” not UMD anymore, but we’re unclear on what sort of flash memory is being used. Sony’s rather proud of the fact it’s offering the world’s first dual analog stick combo on a portable device, though we’re more geeked about the quadrupling of pixel count from the original PSP.

Sony’s live event has been graced by demos of some pretty popular games, including Killzone, Resistance, Little Big Planet, and Uncharted — with the latter serving as a demo platform to show off how the NGP’s rear touchpad can be used to more intuitively climb up some vines. That touch panel on the back is the same size and positioned directly under the front OLED touchscreen, which allows for some pretty sophisticated controls when using the two simultaneously. The combination of a touchy front and back is fascinating – Sony talks about it enabling “touch, grab, trace, push and pull hand movements.”

The NGP doesn’t just have that nifty quad-core processor: it’s got a quad-core Imagination Technologies PowerVR graphics processor too. We can summarise its spec in one word: mighty.

Sony promises that the PSP2’s built-in GPS will mean some interesting location-aware games via the PlayStation Network, and an application called Near will let you know if your friends are, you’ve guessed it, near you. The PSP2 also includes a three-axis gyroscope, three-axis accelerometer and three-axis electronic compass for handheld-waggling motion-controlled tomfoolery.

The new console’s UI will be called LiveArea, which has a bunch of vertically navigable home screens and built-in social networking through PlayStation Network. You can jump between games and the LiveArea without losing your progress and comment on your buddies’ great feats of mobile gaming.

In closing its presentation, Sony trotted out Hideo Kojima to show off a cutscene from MGS 4 rendered in real time on the NGP. It was pulled directly from the PS3 version of the game and ran at 20fps, which looked very smooth indeed to our liveblogging eyes. Videos and Sony’s full PR are now available below.