To get Dragon Balls you have to play story mode( I'm not sure if vs. mode works) and some times you can break a building, the dragon balls are hidden in there, so you get the dragon balls...
I think it's budokai tenkaichi
circle then double click down and hold
budokai tenkaichi 2 is definatley better! no doubt about it
Just smash into things during fights and you get an icon at the top of the screen to tell you if you get a dragonball, after that just win the fight.