LBP and MS2 are indeed the best choices.
LBP is a great game, but it also looks incredible and offers great physics. Even coming from the superior PC, I don't think Smooth Groove will struggle to enjoy the visual presentation. It's only 720p at 30 fps, but it uses high quality motion blur for everything and extremely high quality lighting that gives it an almost CG-like appearance. The soundtrack is also kickass. I know Smooth Groove puts a lot of weight behind these things.
Motorstorm 2 isn't as impressive and, really, has a lot of visual issues, but it's an absolute blast to play.
Resistance 2 is "OK", I suppose, but I'm finding it to be rather dull and it certainly doesn't look impressive.
Naruto looks amazing, but from what I've read, the game is pretty crap.