Vice City Stories did improve upon this game, as is the way with many game sequels. However, Liberty City Stories is still rich with humour, violence and alot of good old fun. Most importantly though, it IS the original portable GTA on PSP and it always will be.
Having both games on PSP creates a contrast between the two cities that would otherwise not exist, and this makes the designs all the more impressive. Also, arguably, Liberty City is the classic GTA city, made famous by GTAIII and adored ever since. Not to mention, GTA4 also features Liberty City, and it is a very cool city inspired of course by New York. Fabulous.
Buy both this and Vice City Stories for PSP, they make a great mini-series of games. To conclude, these are available on PS2 as well - something I don't see the point of, other than profit. They lose much of their charm, and indeed, point, when upscaled to a console that already has full size GTA's.