Well, I have both the Zodiac and the GP32, and the Zodiac is far superior hardware wise. The analog joystick problem has been blown out of proportion. Only a very small number have the problem, and they have since discovered the problem in their production. The Zodiac has better games barring emulation, including emulation the GP32 is ahead. Emulation is not going to make or break since the graphics in most emulations are inferior on any platform. Also remember the Zodiac is a Palm device, so it has PDA functions, can play divx movies, mp3's and Ogg files, can surf the web via bluetooth, and check email. It also has dual SD slots, one with SDIO. Mine has a 512 meg card and a 1 gig card, and 128 meg of internal memory. And if you hold one in each hand the GP32 seems like a kid toy, and the Zod a more professional and powerfull device.
The GP32 is strictly gaming and entertainment, and the Zodiac is entertainment, and business capable, so I think they can coexist in different markets. The GP32 for teens and younger, (the games seem aimed at the younger crowd) and the Zodiac for the post college crowd.