UPDATE: Phillip Torrone has put up a great tutorial called “HOW-TO: Run homebrew apps on your PSP!“, complete with video.
At 5.00am today on PSPhacker.com, a Spanish group known as the PSP-Dev team released a long-awaited exploit for running homebrew (i.e. home made programs such as SNES game emulators) on a Sony PSP. This trick only works with version 1.5 of Sony PSPs, which is common in the United States.
Apparently you have to swap the mem sticks as quickly as possible for this to work. The downloadable exploit package contains the Windows application called MSwapTool-0.1-Setup.exe, Acrobat PDF guides in English, Spanish and French languages, as well as a few other related text files.
From my understanding of the hack, this exploit has two methods. Method A involves the use of TWO Sony MemoryStick Duos and the MSwap Tool Windows program. The MSwap Tool takes a downloaded homebrew app and generates the app into two relevant parts for storing on each memorystick. Typically you’d store the first “booting” part on a smaller memory stick while storing the second part on the bigger one. On your PSP, you’d navigate to the application on the memorystick, and just after you launch the application, you need to quickly take the memorystick out and swap it for the second memorystick in order for this to work.
PSPhacker recommends method B though, which is essentially the same except for how you prepare the two memorysticks. For this method, you need to get the PBP Unpacker which has you creating the files you need (a lengthier process compare to using MSwap Tool, but more reliable).
At your own risk, you can download the exploit package which includes more detailed documentation as: swaploit_1.5_psp-dev.rar.