Picked it up yesterday and put about two hours into it last night.
It's definitely not up to the level of the others in the series. Something about the core combat mechanics just doesn't feel right. It's much more difficult than the other games in the series, primarily due to the fact that enemies seem overpowered, not through sharper level design.
For instance, most enemies take at least three shots from your default/starting weapon. You can power it up through the same experience method as before, but it still doesn't improve much. It even takes three shots from the shotgun thing (concussion gun) to kill most enemies until it's powered up, which is pretty annoying when you get surrounded by 10 enemies that can kill you in two hits.
Enemies do a lot of damage per hit, too. Until you level Ratchet up a bit, many can kill him in one or two hits, which came as a bit of a surprise...
All that wouldn't be bad at all if the strafe controls were easier to manage. By default, strafing is on the digital pad, but it's kind of a pain to reach for it in the middle of a bunch of things that will kill you in a hit or two.
And there are several really annoying sections in every level I've played so far. One level, you keep going down, little by little on an elevator, stopping intermittently to fight a room full of enemies. Goes on forever, very artificial way of increasing difficulty. Seems like they wanted to recreate part of Deadlocked, but not all the way... which doesn't really work for me.
It's still better than most games on the PSP, but it's not in Daxter's league, and it certainly deserved the criticism it got on 1UP.
