Sony’s Playstation Portable handheld gaming console has been trailing in sales to the Nintendo DS since the DS’s inception, but Sony is a far cry from giving up quite yet. Last month we saw a pretty cool upgrade with the version 3.80 firmware for the PSP which brought internet radio through the systems WiFi connectivity. Now Sony is saying that they are partnering with Ebay’s Skype to bring VoIP Skype phone service to the handheld system.

The new firmware is slated to be available for download to the PSP by the end of January and will add a Skype icon and functionality to the Network portion of the PSP’s menu. When connected to the internet users will then be able to log into Skype, manage contacts, view who’s online and of course make calls through their PSP to other Skype users or other PSP owners with the Skype feature installed. Owners will even be able to create a new Skype account right on the PSP.

We knew some upgrades were coming for both these devices and today both the PSP 3.80 firmware and the PS3 2.10 firmware upgrades are available for download.

We haven’t seen the PSP 3.80 version available online yet but it is available through the Network Upgrade menu option directly on the PSP bringing streaming internet radio directly to the handheld device. In fact, I’m listening to the ShoutCast player on my PSP while writing this. You’ll need an Wi-Fi internet connection of course, and after installing the update there is a new menu option in the network settings for Internet Radio. Selecting it brings you to an “About” page that shows two different but similar players available for download to your Memory Stick, one from ShoutCast and the other from IceCast, each having 50 genres to choose from once downloaded.

Firmware upgrades for the Sony PSP usually don’t have changes that are incredibly drastic but for some reason I still get pretty excited any time they come out. It’s almost like getting a slightly new gadget each time, even though I still have the older, fat PSP. Anytime I hear of any upgrade on the way I’ll check for it using the utility on the PSP daily, since most of the time I can get it there before it’s officially released.

Version 3.80 however does promise to bring something pretty cool - streaming internet radio. The update will allow the PSP to pick up streams of online radio broadcasts in the same format that it supports such as Shoutcast MP3 streams. The upgrade will also expand its feed-reading capabilities the ability to pick up “photocasts” from RSS feeds. It will also allow users to import OPML feed lists from other feed readers to import the same feeds on the handheld console.