OK, so iTunes and iPhoto didn't quite make it into X5 ver 1.50, due to certain time constraints and technical difficulties. Therefore, KaotiK DesignZ and PSP 3D have decided to delay it until the release of X5 2.00, which is currently under development.

[Click images above for an enlarged versions ("Aqua" X5 on left, "Dark Aqua" X5 on right)]
Here's some rough descriptions of what iTunes/iPhoto will be:
iTunes = Provides many RSS streams and MPEG-4/AVC music video direct downloads from a large database.
iPhoto = PC-based photo upload, view personal photo albums on X5 in iPhoto.
Both of them are highly internet dependent applications for X5, so make sure ya have some sort of WIFI ready.
The finder, address book, and software update features have all been redesigned. There are many source code changes and optimizations. AIM service/app now has a different provider, too.
What we ultimately are hoping to achieve with X5 2.00 is an entirely member/login based system, which will help provide many additional capabilities and features, and fully harness the maximum capabilities of web portals on the PSP.
Please give us all comments and suggestions that you would like to see in X5 ver 2.00. The more we know what you all want, the harder we can work on getting it out.
We'll keep you all informed as more progress is completed.