I am very happy for this news, the game looked great and I didn't think it really had a shot at being localized.
That being said, I'm truly confused what Sony's strategy is with the PSP. In terms of third party support, they've always gone for top tier console franchises getting a slightly-downgraded experience on the PSP. GTA. Metal Gear Solid. Resident Evil. Assassin's Creed. Army of Two... and we know that many of these games are a direct result of Sony going hat in hand to publishers and saying "We do not want you to leave the PSP and we want to work with you to get your IP here." So, that's how they want people to see their machine.
But in terms of first party stuff, Sony's two biggest investments on the PSP have been Patapon and LocoRoco, both quirky, out-there, low-fi, experimental games, which I think conventional wisdom would say are more at home on competitor's platforms, but that I'm very glad Sony made. Of course, further throwing a conundrum here is that SCEA passed on Badman. Same developer. Same wacky feel to it.
Oh well, no sense overthinking it, I'd love to hear impressions of the demo and it's great to hear SCEA announcing a first-party PSP release I'm interested in.