Coolest idea: Traxion
Developer: Kuju Entertainment
Release Date: Fall 2006
At first glance, Traxion seems a little dull - it's a collection of minigames (all seemingly starring a little red ball with headphones) that have players doing things like gobbling little colored balls on a windy track or hitting random buttons as a chef. But what sets Traxion apart is that it's the first game to really take into account the PSP's ability to store MP3s (we're glaring at you, Grand Theft Auto: Liberty City Stories). Load up your Memory Stick with music files, and Traxion will shape its minigames around them, even going so far as to alter the look of each level based on the information in the song's ID3 tags. If that's not an awesome concept, we don't know what is.
We'll have more on Traxion in the future. In the meantime, check out the best of E3 on other platforms here.