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According to SEfanatics, there is a reference in the latest edition of the official Sony Magazine, to a PSP-style phone possibly being released as soon as this month.

I’ll believe it when I see it, but the fact remains that Sony has filed a patent for such a device, and they may be able to surprise us, or at least semi-surprise us, if the thingamajig actually appears.

My only concern would be having to charge my phone every three hours …

Update 2010: Rumours are circulating again, almost two years later. Will we ever see this phone and PSP hybrid in production? Only time will tell.