Targeting is an absolute BITCH with the black/white buttons - you're better off manually aiming.
The graphics aren't that much better, but regardless, it's still an improvement. Framerate is pretty consistent for the most part outside of a few select scenarios that I can count with one hand, in which some massive slowdown occurs.
The aliasing is quite prominent in 480p, but then again, practically all Xbox games have aliasing on my TV set when I run it in 480p. You don't really notice it after time passes. Besides, I'd rather see a game with jaggies in hi-def than a game with no jaggies in standard definition.
I say if you have an HDTV, and you're willing to put up with a slightly awkward control scheme, get it, unless the PS2 version your nephew has is extremely convienent to get ahold of... looks like you've already made up your mind, though.