[quote name='Waughoo']I read up on Demon's Souls, sounds abit too rough for us. And local co-op is a must[/QUOTE]
Demon Souls is very rough. It's probably the best game on the PS3 but it's one hell of a game to beat.
Now I highly recommend Borderlands. It's not an rpg in a true sense, since it is a fps/rpg hybrid that leans more towards a shooter, but it not only has co-op but it also adjusts to whether or not your playing singleplayer or co-op accordingly. You can get the GOTY edition for a decent price if you shop around. I also recommend only the GOTY version because you get the DLC which is good.