It removes the single player Beat 'em Up scenario in favor of a more traditional campaign mode.
Includes a lock-on button (which doubles as a block button, this does take getting used to).
The camera is fixed to a more consistent fashion which fixes one of the major problems with the home version. It also throws in warning arrows along the edges of the screen, which indicate what direction your enemy is trying to get you from offscreen.
Finishing moves, which were horribly unbalanced in the home versions, are removed.
Includes Captain America and Dr. Doom, though at the omission of Human Torch and Daredevil.
The port has a more comic book aesthetic as opposed to the Real Is Brown aesthetic of the home versions, even giving the X-Men characters their actual comic costumes.
That said, the PSP port has no online multiplayer (though it does have ad hoc support), and the new campaign mode is a bit on the tedious side of things. Also the extra content in the home versions (like the movies and animated comics) aren't included and there's no voice acting. But that's more due to the limitations of the PSP.
The Scrappy: The villains, including the titular Imperfects themselves, mainly because of how they severely subjected the Marvel heroes to The Worf Effect, including many of Marvel's icons like Captain America and the Hulk.
Special Effects Failure: EA couldn't get the curves on Wolverine's claws right, resulting in them popping out with a sharp bend in the claws. How do they even fit in his arms?
What The Hell Costuming Department: All of the X-Men characters. Apparently, EA attempted to make them more realistic by doing away with the flashy superhero costumes, but it wound up making Wolverine look like Spencer, Storm look needlessly Stripperific and Magneto look like he's in his pyjamas the entire time.