Gitaroo Man is spearated into build phase (accumulate life for the battle), then attack and defend phases (which alternate, or occur simulataneously and are preset in each battle, allowing you to memorize them).
It is vitally important to do well (or perfect) across the board since you need the life to weather the misses in bad defences later. Once you have the life, you need to switch your mode of thinking from matching the CIRCLE presses to tapping each button as the enemy attacks you.
When defending, don't focus on the edges -- the symbols for deflecting the attacks travel at different speeds to the center, so use your peripheral vision to get an inkling of what's to come. All the attack symbols correspond to the button layout on the PSP (up is TRIANGLE, right and left are SQUARE and CIRCLE, and down is CROSS). It's important too, to dismiss the failed attempts and focus on the next attack, or successive failures will down your health to nothing in no time.
Similarly, in attacking, press and hold CIRCLE and the joystick in the direction of the wave line. Centering it is not necessary; the things you want to be aware of are the interruptions in the wave line. Releasing the CIRCLE button while your cursor is still in the midst of an interval is less damaging than missing a lengthy interval completely (since you cannot 'get on' in the middle of an interval). Therefore, if you absolutely must, release CIRCLE and take a little damage if you need the time to prepare for the break before a long upcoming interval.