So I love most things about the 3.5 Psionics but it's mostly because I don't think there's enough of a distinction between Arcane & Divine magic. So if you simply call Psionics "Arcane", they work out a bit better.
That said, there's two major balance weaknesses for damage-dealing psions:
1) Crystal Shard. 1st level power, scales at 1d6 per point. This isn't unreasonable. What is unreasonable is that it's a ranged touch attack that doesn't allow SR. At 10th level, a Psion with an 11 int and a high dex can be scary-effective fighter for a few rounds --
even against magic-immune golems. Comparatively, Magic Missile has to go through SR and can be negated by Shield, while Acid Arrow is a second level spell that only does 2d4 damage in a single round (though it goes for a few rounds) and is subject to acid resistance. Frankly, I think this is more indicative of WotC screwing up the definition of Spell Resistance and Spell Immunity than anything...
2) All of the Energy Spells allow the caster to swap out energy types on the fly -- which is a real snub to sorcerors who get stuck with "Fire" when they choose "Fireball" (unless they take some optional feats to get around it which they don't really have to spare). I would suggest that this can be somewhat balanced by making the psion choose a primary energy when they take their first Energy spell and then they can gain the ability to use other energy forms by taking an "Expanded Energy Mastery" feat per additional energy form or somesuch. (Your NPC wizards and clerics will appreciate this as their "Energy Resistance" spells may be useful for more than the first round of combat, too.)
I've got plenty of other opinions on what I've read, but those two items are what I've actually seen in-game.
Cheers,
::Kaze()