I just bought a refurbished model from EB yesterday. I would buy a refurbished model over a new version for a couple of reasons.
1. I can check the screen before paying for it. Guaranteed no dead pixels. I can also check the firmware beforehand to make sure I can run homebrew and emulators.
2. The condition is indistinguishable from new in all cases I've been in contact with. Refurbished quality is quite good. Perfect shine on the screen without a single hint of a scratch. I imagine most refurb models come in because people returned for dead pixels. In those cases, the PSPs were probably booted up a handful of times and returned. Or returned immediately after turning on. Sony replaces the screen/fixes the stuck pixel, and it's brand new. I saw their "preowned" PSPs, and I was not too happy with the condition. I'm pretty uptight about the condition of my gaming devices/media. I even got the wrist strap and wiping cloth (neither had been pulled out of the bag), and the UMD sampler disc.
The first combined with the second would have me buy refurbished over new. Even if they were the same price. The $50 discount is a bonus. I was scared of buying a PSP before just because the fear of dead pixels. Then after that, the fear of a high firmware version. In the case of the latter, I'd totally be out of luck. No, the PSP isn't worth it to me for the UMD games alone at this point.
However, the warranty is only two weeks, and the extended warranty (60 days) is $15.