Legend of the Dragon follows twin fighters, one who has inherited the power of the Golden Dragon, the other the power of the Shadow Dragon. Ang (The Golden Dragon) has vowed to go to each of the twelve zodiac temples and defeat the guardian there so that he can become strong enough to defeat his enemy, The Zodiac Master.
Meanwhile, Ling (The Shadow Dragon) is also traversing the various temples taking on opponents in order to prove herself strong enough to take down her brother. At least that's the game's Quest Mode stories.
Fights seem to take a cue or two from the Dragon Ball Z line of games. As you attack your opponent, you build up ki. If you build up enough ki, you are able to transform into your guardian (Ang transforms into the Golden Dragon, Ling into the Shadow Dragon, Xuan Chi as the Monkey, etc). Once transformed, you are able to use more powerful attacks at the expense of ki. If you use up too much ki, you transform back into your normal state.
There are two other modes in this game, Multiplayer and Practice. Multiplayer lets you fight against computer or human-controlled opponents, while Practice mode lets you try your hand at any of the unlocked characters without risk of defeat or go through a scripted set of tutorials. I would definitely recommend starting off at the tutorial because the controls and feel of the fighting moves you can perform just feel off and require some guided training before you jump into the Quest Mode.
Legend of the Dragon also offers a Bonus Mode that lets you view an episode from the series (Ling's first transformation into the Shadow Dragon and her first strike against the new Golden Dragon) as well as a couple of other treats.
Oh and of course it wouldn't be a PSP without loading times. While the game does a good job of breaking its Quest Mode into easy to manage chunks for gamers on the go (something a lot of PSP games can't seem to grasp), the load times before fights are long enough to make you wonder if you have time to play the game some while on the way to work or between classes at school.