It may be a portable PS2 (or a level below it...I've read that it's not quite up to PS2 standards), but it's also rumored to launch at $250. The Nintendo DS is rumored to launch for $150.
After seeing the new Metroid Prime game run on the DS, I can say that it's definitely above N64 standards. Not Gamecube-quality, but pretty damned close.
Of course, I want both of them.
-Lasereth