The 3DS is the way to go if you're looking into entering the handheld market. As Atticus mentioned, the DSi is an enhanced DS Lite featuring a camera and several built in applications including sound editing software and the DSiShop. On the downside, however, the upgrade removes the ability to play Gameboy Advance games. The 3DS, on the other hand, is a brand new system, the first of the eighth generation machines. The system's primary gimmick is obviously the glasses free stereoscopic 3D but it's also built in with loads of other quirks including a gyroscope and accelerometer. A bigger version of the system is available, known as the 3DS XL. All DS games are backwards compatible although they only take up a portion of the top screen seeing as how the 3DS's 3D screen is larger than its touch screen, a disproportion not present in the original DS models.
What software is worth purchasing? Super Street Fighter IV 3D Edition, The Legend of Zelda: Ocarina of Time 3D, Star Fox 64 3D, Super Mario 3D Land, Mario Kart 7, Resident Evil Revelations, Kid Icarus Uprising, and New Super Mario Bros. 2 are all worth checking out. Some upcoming games include Paper Mario: Sticker Star, Luigi's Mansion: Dark Moon, and Animal Crossing: Jump Out!