Negative, there is no soft reset.

Totally bogus, I know. ;_;

So I've heard about slowdown. Is it better to just play PSX FFT on the PSP via emulation?

Depends. The slowdown is 18 different kinds of hairy nutsack, but as someone who's played through and beaten the PSX version a couple of times, the new translation, new jobs, new scenarios, new FMVs, the multiplayer, and new items made it worth putting up with.

After awhile I stopped noticing the slowdown for the most part. The only things that really continued to irritate me were cure spells, since they seem to take forever as the green light spins around your characters. Even those weren't too bad once I got used to it though.