Basically, the Location Free base station will connect with your PC, TV and PSP. This will give you access to streamed audio and visual content as well as the ability watch local broadcasts over the Internet. That was only mean to be for a custom-made unit, but using the PSP's Location Free Player, you'll be able to do all this from any Wi-Fi hotspot that you can find.
In addition to this, Sony will soon release a new version of the PSP Media Manager, which is looking to make the transfer and conversion of multiple media formats as simple as possible. This is meant to open up a whole load of new possibilities with regard to the type of content available for PSP. More news for PSP owners is that Sony is looking to relaunch its iTunes-style Connect music download service in March - offering music, games, videos and movies, which can be downloaded directly onto your machine. A shame that there's only one game that really utilises the extra game content at this time.
Sony were keeping quiet on exactly what form the game content will take, but you can probably expect to see lots of casual games available along with re-inventions of classic franchises. It's likely that it will resemble the Xbox Live Marketplace. According to Microsoft, more than four million pieces of content have been downloaded since the service launched in November. Well worth a look for Sony, then.
The multimedia capabilities of the PSP, rather than its obvious function as a games machine, are clearly a focus for Sony at present. However, it is difficult to gauge how successful this particular venture into extensive connectivity and digital distribution ambitions without further information on pricing, range of content and specific launch and availability dates. This information is expected to be announced in due course.
On a slightly related note, Sony used its presence at the show to announce the distribution of 4000 development kits of for the PS3. So the principal studios now have the tools necessary for the operational startup of PS3 titles.

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