Been playing this for about a day now. Bought it based on your impressions, and they were pretty much right on the money.
In some ways, the graphics are simple... but there's a lot going on (seems like 50/50 ship swarms and bullet hell), and they're uber-crisp. Rock solid FPS too... has to be 60. I actually wish for slowdown in spots though *grin* I kind of wish the backgrounds were as lifelike as Ikaruga or something, but they're sufficient (the team sure likes space platforms). They sure put the polys to use with the bosses. Can't wait to unlock the Boss mode.
Love the super widescreen tate format. Holding the system the long way actually isn't uncomfortable whatsoever. I'm not even bothered by holding my right hand up a bit to use the buttons. Great way to put the screen to use. I'll be keeping an eye on future PSP shmups, especially ones that use this image format. Oh my pants are warm thinking about a Raiden or Strikers style game with 480 pixels of vertical resolution.
Not sure I'd agree that it's easy. There's a lot of bullet hell going on, especially after level 4, and the hero ships don't exactly upgrade to Godly status. Plus, the game likes to quickly summon enemy ships from the side of the screen. Come to think of it, this is one of the few shooters I've ever played where ships come out from the bottom and sides as often as the top. Sitting in one place is a bad strategy, so is staying put at the bottom-middle. Gotta have insane reflexes! Love to see someone one credit this one. Then again, is there even a limit on continues? I played through to level 9 and used probably 4 or 5 continues before I had to give up and run some errands.
The instant respawn is nice, because I'm dying too much right now.

Gotta practice. The power up system is really simple... perhaps too simple for some. I'm okay with it. Basically, your ship's weapons become fully powered after you collect 3 or 4 "P" boxes. Any extras you get cause a bomb to explode around your ship, eliminating enemies. Also, it seems like you can survive one bullet hit for every 2 P boxes you have...
I wish the ships were more powerful. They're balanced at least, I guess. Of the 3 to pick from, only the last one has a power shot that's really a killer. The spear power shot on the first ship is strong, but man, you gotta be dangerously close to things to put it to use. A good "save me" I guess. At least the power shots eat up bullets. Heh... I wish, I wish, I wish there was a way to pair up the first ship with all the frontal firepower with the big beam power shot on the third ship.
All in all, I'm happy with my purchase. Easily the best portable shmup ever, thanks to Nanostray's flaws... but still very solid in its own right. Reminds me of a cross between Aleste/Space Megaforce (the look) and Xevious (some gameplay, some ship designs).