I wanted to make it as simple a possible so I decided to use 4 AA sized NiMH batteries rated at 1.2v (or 1.25v) Which can provide the needed 5v without regulation. This also makes it possible to more quickly charge PSP's which can draw almost 1A when charging.
To extend the functionality I decided it should also be a flashlight. But a quick search of the local stores showed that most AA flashlights are generally 1 or 3 cells. Fortunately for me I decided to check the bike aisle at Wal-Mart and found that many of the bicycle headlights are 4AA cell!
So using a bicycle headlight we'll end up having a:
1. portable USB power
3. bicycle headlight
Not only that but I happened to have a Luxeon III star and optics laying around the house so, why not improve this project by switching out the bulb for the Luxeon?
Expandable Capacity Bicycle Headlight
The most interesting part for me is that if you decide to make a second battery pack and connect them together via USB you'll double the burn time of the flashlight! How cool is that when being used as a bicycle headlight?!?
How about connecting it to a USB power generator such as the Hand Crank Lego USB charger set up so it's turned by a tire?
Multipurpose enough? I think so.