There are a lot of solutions here that work. Allow me to summarize (no disrespect intended to those others who have posted solutions):
You can use the map here to find pretty much anything in the game: environment stuff that gives PP, magazines, weapons, etc.
http://msxbox-world.com/features/Dead-Rising-2/index.php"legit" ways to easily gain PP:
- Play Case Zero in the Live arcade. You can get up to level 5 and that carries over into the full game.
- Give Katey gifts. Many can be found right outside the safe room. See the gift achievement solutions for a complete list.
- Rescue survivors. Even on a disposable run (like an "all foods" or "all clothing" run), you can pick up the easy survivors. Unlike the original game, survivors in DR2 are pretty competent and can defend themselves and generally keep up with you. Try giving them guns or decent weapons like the fire axe to help their survivability. Survivors from later in the game are worth a lot more than the ones on day one.
- Kill psychopaths. Some of them are really easy to kill once you get the pattern down and they give lots of PP when you kill them.
- Use the environment. The craps pit in the Royal Flush Plaza, for example, is 10k PP for throwing the fuzzy die a few times to make 7. So is riding the waterslide in Palisades Mall. You can do this every time you re-enter an area. If work at this while completing your other tasks, you will get a lot of extra PP for very little work.
- Use combo weapons. Some of the combo weapons generate quite a bit of PP. Every maintenance room has components nearby to build combo weapons, so build them often and kill zombies as you go. Also, heavy attacks (hold X) are worth quite a bit more PP than light attacks so try to use those.
- Use magazines. There are magazines which will boost your PP rewards for killing zombies and psychopaths and rescuing survivors. The "survivor rescue" magazine also boosts PP when giving Katey gifts.
- Finish the game. Every time you finish the game, whether you get a good or bad ending, you get a boatload of PP.
"grindy/cheater" ways of leveling
- Abuse the magazine glitch. Have your friend collect magazines in their game and save their progress. If you invite them into your game while they are playing single player, they will arrive with their inventory. Have them drop their magazines, quit out, and repeat. You can fill as many of your inventory slots with Horror or Rescue magazines as you like and really boost your PP rewards this way.
- Abuse the survivor rescue glitch. Have a friend create a save where they have multiple survivors in the bathroom outside of the safe house in Royal Flush Plaza . Have them invite you into their game, then save the survivors, giving a bunch of PP. You quit out and save your game while your friend reloads the save. Repeat. Works best with survivors from later in the game (they are worth more XP) and if you are carrying multiple Rescue magazines (see the magazine glitch above).
- Grind on killing zombies, especially with combo weapons and multiple Horror magazines. One of the other solutions (WidestSunil) mentions a dynameat strategy in Fortune Park. If you go this route, keep in mind that saving and then loading that save is a faster way to reset the zombies and weapons than entering and leaving an area.