^ The only thing I can think about are the textures. I think UMD-discs don't have the same capacity has a DVD disc, so they have to compress them all. At least, that's what I think.
I mean, look at this screenshot from Star Wars: The Force Unleashed:
Good example or not, there is definitely something missing there.
*EDIT: Here is a better comparison:
^ PSP
^ PS2
Random game thought :
Why is Bionic Commando Rearmed 2 getting so much hate? We finally get a real game and they're not even satisfied... I'm starting to hate the gaming community so f****** much...