Yeah, If I could get the movies at low low prices, I wouldn't mind either.
But I would not pay the full price to just buy a movie to watch on psp, just like I wouldn't pay to buy a movie to watch on my Axim.
As for the music, do you think stores would soon sell UMD music Discs?
I vividly remember a lot of stores selling pre-recorded MDs at one point, later they just disappeared and only SonyStyle sold them, later even they removed them. Just think of UMD Movies as MD Music.. Just the first couple of thousand people would buy them, if they really really love the movie. Godfather on Subway, thats nice!

Although why not rip it to the PPC for free off your dvd. Again, it comes to "what you already have", as far as other devices concerned, and how many you want to haul around.