The performance of iPhone's MBX Lite should be well short of Dreamcast's, too. Similar to Dreamcast, though, it displays with superior image qualities compared to PSP.
What's the iPhone's MBXLite clocked at? Even if they're operating at the same frequency, the comparison would be purely on a GPU vs. GPU basis and I'm not so sure that the MBX Lite would lose after all, since it's 2 generations apart from the DC chip (if memory serves well) and there have been quite a few advancements even on "simple" tiling algorithms since then. Fetch the SoC specs of that iPhone and compare to that: http://www.firingsquad.com/hardware/dreamcasthw/page2.asp