Moving back and forth between levels is as simple as gliding over colored amoebas (red to go down a level, navy blue to go up). The best aspect of the game is its controls, which use only the PS3 controller's tilt sensor. We had trouble at first with the accuracy, but within a few minutes we were commanding our avatar effortlessly.
The game was designed so that you can set the difficulty. If you are stuck on a level, simply go back a few tiers, level up, and return. We can't imagine any reason to play this competitively, but we could see relaxing to flOw after a stressful day.
FlOw was running at 525p (480p) -- the graphics were akin to what we've seen the Nintendo Wii produce. We aren't sure if the title will available brick-and-mortar or as a download (or even packaged in the console's hard drive). If priced correctly, flOw could end up an essential title similar to what Geometry Wars represents for the Xbox 360 -- a small, casual game with mass appeal sold for pure profit.
Joystiq interview: Jenova Chen
[Update 1: Decided to clarify Geometry Wars reference and defend my point on "essential title" in one fell swoop. Booyakasha!]