It's an abomination because of the high school setting, terrible character designs, tiny maps and decreased size of battles and emphasis on stat grinding above winning through tactics. Oh and the fact that the game is a series of mindless miniquests instead of story based battles.

It's typical of sega to make an incredible RPG then follow it up with a crime against humanity.

See for example, what they did to Shining Force, Phantasy Star, Dragon Force etc

I think they will do a ps3 VC. They already have the engine and assets for the ps3 version done, so would a waste they go for psp only if they already so much done on the ps3.
I think the psp version announcement is good news that they aren't done with the franchise. And they think the franchise has a future,otherwise they wouldn't keep investing on a dead horse.
I think they will announce another version for ps3 for end 2010 or early 2011, VC3.

I'll happily play it on my psp, though I'd rather play on my ps3