In an interview with 1up, Akitoshi Kawazu of SquareEnix talks about the world of Ivalice (the setting for FFXII/Reventant Wings, FF Tactics) and reveals the possibility of a Vagrant Story port heading to PSP.

"1UP: Since you guys recently renovated and recreated the original Final Fantasy Tactics, it stands to reason that the only outstanding title in the Ivalice mythology --- Vagrant Story -- would be the next logical port to PSP, and we can't even imagine what sort of treatment you could give that game as you did with War Of The Lions. Can you tell us if you have plans for that game?

Kawazu: Vagrant Story was a title that pushed the PS one to its limits. The technical hurdles in porting it to the PSP would be extremely high. Of course, I think it's the next natural candidate for such an update, and there's no denying its extreme popularity overseas."

While that is not a definite confirmation or even a hint that they are working on it, one could easily assume it it something they are going to work on at some point, especially when you look at Square's recent remake/port-happy release schedule.