Liberty City Stories will be its name.
To further the claim, Rockstar Games are the registrant of the domain name LibertyCityStories.com which makes this a very viable name for the game.
I was able to check out a few of the booths being built at E3 this afternoon, one of which was that of Rockstar Games. It was pretty simple—basically just a bunch of buses parked inside a chainlink fence—but the important part was what was painted on the buses. You see, each one was dedicated to a different Rockstar project, and, nestled between a Midnight Club bus and a Bully bus (delightful alliteration, might I add), was a bus that was painted totally black but for a bit of text that read, “Grand Theft Auto: Liberty City Stories” directly beneath the PSP logo. Could this be the official title of GTA PSP?
We'll bring you more news as we get it. Our Liberty City Stories section of the website will from now on be reachable via GTALibertyCity.com, a rather apt domain for the game don't you think?
Thanks to Codename:GTA for the news.