I've said before I'd like to know more about the '68 and '69 teams, but I think the early days - as in the first two seasons - of the Paterno era would be just as interesting. In particular, the game that launched the Paterno era.
The game in question was probably played in November of 1967 against Number 3 North Carolina State. Here is an article about the game from long ago: http://sportsillustrated.cnn.com/vault/article/magazine/MAG1080573/index.htm
The result was not an upset. While the people who vote in polls looked at North Carolina State's 8-0 record, the men who make their living by gambling inspected unranked Penn State's tough schedule and its unlucky two-point loss to UCLA and they made Penn State a slight favorite. But while many people expected Penn State to win, few thought it would win this kind of game. A young, fast team, which is full of sophomores and is noted mainly for offense, Penn State beat North Carolina State with its defense.
After a middling season in '66 this game gave Penn State a huge momentum boost that carried them for two seasons of undefeated, untied glory. And yet, it's not even mentioned in a book I have called "Greatest Moments in Penn State History."