I bought it for $15 the other day using the GGC. Pretty cheap, even with the Google Checkout deal going on.
I have no experience with Lumines on XBLA so no comment, sorry folks.
It's pretty much a port of the PSP version of Lumines 1. Same backdrops, menu interface, music, but with a few new skins. I prefer this over the PSP version since a single game usually lasts at least an hour (which makes it not so portable in my view) and the PS2 controller doesn't cramp my hand as much. Music is much nicer through regular speakers.
Other than being able to play it on a TV with a real controller, the only notable addition is you can play two player "push" mode now on one screen.
No new licensed music or music videos like Lumines 2, but I prefer the minimalist style of 1 anyway. It's almost hypnotic.
I'm playing on a 37" CRT television with S-Video input, it looks fine to me. Nothing looks too pixelated for a PSP port.
Lumines is my favorite one player puzzle game, so to me it was easily worth $15 being able to play it on a regular TV (and with a physical disc I can put in any PS2).