If you want to know what I think, I really don't mind seeing black borders around the game image. I leave the scaling at 1:1 for all the emulators I use. Hey, at least the border isn't a really obnoxious color or anything.
In my opinion, the PSP's screen is better if you want to watch movies, and it's also better for games that are designed to run on it (duh.
). I don't think the PSP is ideal for emulation. As in, if I wanted to play some emulators on a car trip or something, I wouldn't bring my PSP to play them. However, if I wanted to play some good PSP games (which someday won't be just Lumines hopefully...), I'd bring it. Since I know scaling is really crappy on LCDs sometimes (try running a DOS game on a flatscreen, UGH), I don't use it, and just leave it as 1:1.
So anyway yeah, scaling for me is not an issue, and it CERTAINLY won't prevent me from getting a GP2X.
Also, another thing that irks me about the PSP's screen is that mine came with dust in it, so there are some specks on the screen that I can't clean. ¬_¬