It's going to be interesting. There's inherently no technical difference between LTC and BTC (block intervals are not drastically different in practice, and nominal count of coins is meaningless). Network effect-wise, Bitcoin has much more hashing power (and thus resistance to 51% attack) than Litecoin, but it is also more valuable one, so it also does not matter much.

I don't buy there's any "diversification" in holding both LTC and BTC. The technical and legal risks are mostly the same. To me, in the long run, it's more profitable to put 100% of your money in the most liquid of them, which is currently Bitcoin. Simply because people want one money: one most marketable, most widely accepted asset.

LTC is still valuable because we are in a very early speculation phase and most folks got used to presence of both gold and silver, and there's very strong incentive for recent Bitcoin miners with video cards to pump up LTC (as that's the only thing to mine on their equipment right now) and sell out for Bitcoin while they can. Either Bitcoin or Litecoin must pop, there's no economic reason for them to stay in some balanced relation. I bet even gold will largely lose wealth as it's moved to Bitcoin, but then gold has very different risks and features, so it may find its balance with Bitcoin.