The UMD Passport service would allow PSP owners to register their UMD games and get a discount on the downloadable version of those same games. This allows PSP owners to at least get some value out of their existing system and games when, or if, they upgrade to the Vita.
It seems that if you live in the U.S. and want to play your PSP games you have two choices. You can either keep your PSP and the associated UMD games or you can rebuy all of your games, at full price, on the online store and play them on the Vita.
What a wise deciscion. I am sure it will convince lots of PSP owners to purchase a Vita.