Kotaku seems to think so. In a news post today they stated that various third party highly placed sources definitively confirm that the PSP2 is on the way (though it won't look like this). Apparently, third party publishers want to have games ready for the PSP2's launch, but Sony hasn't yet given them the kind of info they need to start creating games. This isn't a strange practice as with any system, the first party companies get the dev kits and system specs first, but hopefully they don't wait too long to send out that info. The rumor is that clear info on the PSP2 will hit at this year's E3 with a possibility of the system launching as early as the end of this year.

The system is said to have a beautiful screen (no change there), faster load times, better buttons, 8 gig internal flash, UMD support, and the possibility of a touch-screen and built-in camera. Kotaku didn't list their source specifically (why would they, no one wants to lose a job), but they were right about Sony's Home, so there's always a possibility this rumor will hold true as well. I personally think it's too early for a PSP2, but if it supports my old games I'd definitely upgrade.