The lite is DEFINITELY worth the money because:
a) smaller and hence more portability
b) MUCH brighter screen
c) screen also viewable at wider angles
d) longer battery life
e) better sound (I thought the "surround" setting worked better in the light)
overall, deffo worth the extra £20-30 over the old DS (after all, that's only the price of a game after all).
Oh, and yes, you get 500 vip stars with it (I was hoping for more actually

)
Killarapp: you've hit the nail on the head there....I value portability and battery life over and above raw power in a handheld.....and as CaptainFF rightly pointed out, Ninty has a habit of making FANTASTIC handhelds

.
An interesting point is that one thing that turned me off the PSP was that the analogue nub is in completely the wrong place....I get severe thumbache after only 30min of playing.
Yesterday, I went to bed early (10:30pm) in the hope of getting up early and made the mistake of thinking "I'll have a quick bash at that new fangled SMB game on my DSlite.
Next thing I know it's 02:00am in the morning

.....I can play
for hours on this bloody thing.
(I shoulda known, I'd previously made that mistake with Zelda on the Wii

)
If you want to make your mind up about the cost:benefit of the lite, look at these reviews:
DSlite review 1
DSlite review 2
DSlite review 3
They're well worth a watch
