Interesting thread... I use both and I fail to see how PSP is better than PS. (I'm using PSP 7, and PS 6)
Many of the arguments here seem to be about effects rather than more day to day tasks.... CMYK, channels, layers, paths, styles, text, masks, extract..... Yes, all these are supported to some degree by PSP, but is anyone seriously saying there's any comparison? And what about the web? PS comes bundled with ImageReady which knocks the spots off anything PSP has to offer.
Don't get me wrong, I actually think PSP is a great piece of software, and I actually used it to produce the graphics on a commercial website, but it is frustrating to know that I could have had it done in a fraction of the time in PS. Quick example: I wrote some text over a graphic and tried to apply a drop shadow. No can do. Must rasterise text layer first. I have to use the same style for lots of different headings, so this is a real time waster. In Photoshop, I could have applied lots of effects to the text directly, and still gone back to correct any spelling mistakes. To get this kind of versatility in PSP, you have to maintain lots of hidden backup layers, and on a big project it can quickly get out of hand.
To sum up, both of them are worth the money, but you get what you pay for....