The first thing I love about this game is its length. There are three entire storylines to complete, and each of them took me about 14 hours on normal. Then, if you want to collect all treasures or unlock secret episodes, that's going to take you several more hours. This little thing is longer than the majority of console games. The graphics, too, are absolutely beautiful for the PSP. It looks better than KH2 did on PS2.
One downside is the loading. It's understandable since so much content is packed onto one little UMD, but a 30 second load every 5 minutes can still be a huge drag. There are no glitches that I noticed, and the only other downside I can think of is some spontaneous tough battles - but these are easily beaten by an hour of level grinding.
The combat system is by far the best yet. Mana is completely gone, instead replaced with a system more like that from Chain of Memories. You can equip so many "deck commands" - these might be blizzard, aero, or a keyblade dash - and these each regenerate on their own time. It's great being able to use magic as much as you want, and rely on it if you don't like strength. When I played through as Aqua, the magic character, I ended up not using my keyblade at all.
The storyline, on the other hand, does not fare as well. Unfortunately, across so many iterations, the Kingdom Hearts story has become very convoluted and confusing; Birth By Sleep ends up raising more questions than it answers. Pay close attention to the story and cutscenes, because you'll learn secrets about previous KH games, but don't expect to have all of your questions answered.
Overall, this game is absolutely fantastic and a blast to play. In my opinion, this is the best game that's ever graced the PSP. Despite my minor gripes about the storyline and loading, the gameplay is the best ever, and you'll find yourself not wanting to turn the machine off. Give this a rent for sure, and maybe even a buy.