My good friends at Lik Sang have informed me that the 4GB Hardrive for the PSP which also has a Double strength battery and software for encoding movies is down to $179 from $199, heres more info:
The X2 Battery is a direct replacement for your PSP's rechargeable battery, but offers double the capacity of the standard model. Now bundled with a 4GB HDD, it gives you plenty of space for your saves and files on the go.
The 4GB HD uses ultra-reliable Micro-Drive technology. The HD interfaces with the PSP by means of a flexible Memory Stick™ adapter which is plugged into the Memory Stick™ slot on the PSP.
Once connected, the body of the HD attaches snugly to the back of the PSP by means of two location posts which slot into corresponding holes on the back of the PSP. When used in conjunction with the X-2 double capacity battery the 4GB HD forms an ergonomic extension to the PSP which follows the neat lines of the handheld, fitting snugly in your palms. Once connected, you use the 4GB HD just as you would a normal Memory Stick™; you can playback video, MP3s, movies and images and save from inside your PSP games.
For full information and to buy one for yourself check out Lik Sang Here