Have you gone to the 3rd edit screen, and opened up all the advanced palettes and toolbars? Comparing Photoshop CS5 to PSP Photo X4, I find very little that PSP doesn't have, including the more advanced tools. Most folks just use PSP in the first edit screen, which is much more basic and 'automated' with lots of simplified shortcuts and auto adjustments. But the number of tools that can be opened up in the advanced Edit screen is pretty much the same as in Photoshop...far more than 99% of the users will ever need or even know are there! I wonder how many even know the advanced edit screen even exists. Even advanced Photoshop features like Content Aware fill and Smart Scaling are in PSP.
Also as to William Beem's question/observation re: third party support: the interesting thing about that is that PSP works with virtually any plug in that works for Photoshop...so the same plugin enhancements operate in both systems. I've added several brushes, noise reduction programs, software such as Nik's plugins (Color Effects, Silver, etc), and Topaz's plugins (Adjust, Clean, Simplify, Denoise), various scripts, etc that I use in both PSP and PS. Just copy the .8bf file into the Plugin folder of PSP, and they open up just like in PS.
I set up my PSP X4 interface using the advanced edit screen with all my major tools along the top and left toolbar, layers palette and other adjustment palettes down the side, just the way I have it set up in Photoshop.