Dark_AleX has released another edition of his custom PSP firmware. Just as it appears '3.03 Open Edition Revision A' (OE-A) is essentially a modified version of Sony's official v3.03 fimware. 3.03OE-A also comes with a modified version of Sony's PS1 emulator, popstation; and with this latest custom firmware release, custom-made ISOs (game files) can now be compressed to conserve memory stick space.
Ethical concerns aside, it's amazing how the PSP homebrew scene has exploded ahead of Sony, unlocking the company's emulator for use with all PS1 titles. With just a few hours of research, a stack of old PlayStation games on hand, and perhaps a little trial and error, you now have the power to forge your own emulation experience -- imagine that. You don't even need a PlayStation 3.
Update: clarified that popstation is a modified version of Sony's PS1 emulator.