I guess you people didn't actually watch the game, eh?
A few points:
Bowls were initially started as exhibitions with all the awards happening BEFORE THEY WERE PLAYED. This ended in 1969 when Richard Nixon declared the winner of the Texas/some other team game the National Champion. Coincidentally, the Penn State and Joe Paterno had just wrapped up their second CONSECUTIVE undefeated season and were jobbed out of the chance to play for a National Title.
As such, the bowl games that were originally designed to exhibitions in warm climates have since become inherently unbalanced games that mattered. The fact that USC had to travel 11 miles sure does make a difference regardless of prep time. Furthermore, it's no secret that conference officiating each have individual sets of rules and I saw some interesting interpretations on holding during USC's second quarter runs. Apparently pass protection = holding a defensive end. Ironic how USC had issues with the run game and running backs being hit behind the line, but suddenly pass protection magically happens. The game was called equally for both sides, but the SEC, Big Ten and Pac-10 all call such things very differently.
For those that actually watched the game, Penn State had little trouble keeping up with USC - they were simply outplayed in the 2nd quarter and couldn't make up for it with superior play elsewhere.