Wheeee I'm picking up some dislike here!
The offline mode for PSU is okay if you happen to like anime-style plots and presentation, that's really what they were going for I think, at least with Ethan's part of the story. Extra mode (which is the character creation thing you guys are talking about) just lets you do the free missions from the offline mode, offline. It's neat to be able to make a character, yeah, and it's a bit more like PSO was, but IMHO I'd rather have established characters and a plot with a little character development, cheesy as it may be.
Illuminus took a slightly different route and the entire offline story mode is played with a handmade character, and it feels a lot more like PSO, except that the characters actually have some personality to them. Largely that's due to PSU's story mode, though, as you know what to expect from them. The plot is quite a bit more in-your-face than PSU's, too, it gets to near PS II levels at the end with... well I won't spoil it. Lets just say if you liked PS II you'd like the last 4 chapters of Illuminus.
Also, the offline modes are WAY, WAY, WAY more friendly about handing out rare items and cash than the online mode, which is nice but a little frustrating if you play online a lot. PSO was a lot cooler in that respect as you could carry offline stuff over, but it was also a lot more rampant with the cheating.