I can't believe the two best portable systems for their time haven't received near enough love on this thread: the TurboExpress and the Lynx. Both systems were WAY ahead of their time hardware wise, with the TurboExpress the superior of the two. Never mind that it played games designed for it's sibling, the TurboGraphx; no other system has held as much power for it's time period. The Lynx is definitely second, though; far superior to the GameBoy in hardware specs and even edging out the GameGear, which was released several years after the Lynx debuted. Both the TurboExpress and the Lynx had a great library of games to draw from, but both also had the same problems; mainly due to high pricetags and bad marketing. Neither of them stood a chance against Nintendo in that department.
The Sega Nomad was definitely a great handheld system, and could easily be compared to the TurboExpress as far as hardware is concerned, but it came out near the end of the Genesis' life, and was mainly a way for Sega to try increasing sagging sales of Genesis games.
The NGPC deserves an honorable mention mainly due to the fact that it got many things right in comparison to it's predecessors (good quality screen, low drain on batteries), but it too suffered from abysmal marketing, and simply didn't stand a chance against the Nintendo juggernaut.