well,here are the Difference:
1.The videos you saw on the PSP seems like they were recorded on PS2.
2.In PS2 lots of smoke or dust appears when you takedown somebody or when you are riding on a different land.While in the PSP only very little smoke appears(I don't think you can see it too much).
3.Slamming,Shunting and Rubbing noises are Different in PS2.
4.There are more sparks in the PS2.
5.More car colors on PS2(these are one of the examples:a Silver Street Dodger and a green Factory Sport.)
6.Crashbreaker seems to be more powerful and BIG in the PS2.
7.THE CAR STATS WHERE DID THEY GO IN THE PSP!(this has some meaning that crashbreakers and car speed will be the same)
8.In PS2 your cars mirror can be flying or get remove.While in PSP only a few cars can only remove their back mirror but not their front and side mirrors and even sometimes.(WOW!I guess they really do love your car.)here are one of the car examples that's back mirrors can be remove by crashing hard on the back:Tuned drifter and other cars you will see soon.
9.When you use crashbreaker in PSP the mirrors DOES NOT remove!(THEY REALLY DO LOVE YOU CAR!)
10.One thing is that in PS2 when you crash you can here a fast whoosh sound when a car pass you but in the PSP you cannot hear it.(this is one meaning that you really did not know if a car pass you or not.)
11.Last thing is that in PS2 you can see the mirror pieces while in PSP they are only white and shiny dots.
April 02,2008 here's some more:
12.Your smoking drifts can be seen in PS2 but not in PSP.
13.Car parts can be removed easily in PS2 but not in PSP unless if you use crashbreaker examples are spoilers and alot of other parts too.don't believe me?Try removing the spoiler of tuned muscle in the PSP without using crashbreaker(please if you kept on trying and trying you should stop).Update:I have now discovered in the PSP that some cars can remove their spoilers by crashing hard on the back instead of crashbreakers(sorry about this).
March 27 2009:My IQ just increased
14 is replaced cuz its not a difference
14.Blur Effects are disabled in the PSP version
To those don't know blur effects
Blur Effects happens when you speed very fast or boost
Screen goes blur when this happens
This only happen in the PS2
look at the introduction video for more proof
15.Deformable parts or mesh is wrong in the PSP your headlights,hoods, and taillights still remain in the same
position like something invinsible is holding it.
Note:I think all of this came from a better Flash Player.
If anyone of you want to post some difference post it on the comments.
and that is all even though PS2 is nicer still I want you to still enjoy the game!
Sorry if I have something wrong here.