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FFVIII is a great portable rpg. I used to get in a few games of triple triad during my breaks at work. The characters look more realistic when squished to fit the screen. In a lot of the earlier parts of the game the art direction made it really easy to view on the psp screen even outside.

Tomba 1 & 2 and Umihara Kawase, Klonoa are also examples of great art direction that is viewable outside on the psp and great platformers to boot. , Mega Man X4 & 5, Castlevania SotN, Crash 3 are great as well but not quite as vsible.

Ray Storm and Einhander are good if you like shmups

Mr. Driller and I.Q. are great portable puzzle games

Soul Blade is better than any psp fighting game, Bushido blade rules as well

Crash Team Racing is a more than acceptable Mario Kart clone. I and even gamespot like it a bit better.

Being a Playstation in my pocket makes the PSP the best portable console ever.