Homebrew on PSP systems with firmware 3.50 was thought to be impossible ... until now. An exploit was found in the classic puzzle game, Lumines, that allows a Hello World application to run on the system. Users must download a special program, and install it on the Memory Stick. When launching Lumines, the exploit will be taken advantage of.
This is a huge win for the homebrew community. Most likely, downgraders will be created to take advantage of this exploit, which will allow all modern PSP owners to revert to a homebrew-capable firmware. Most likely, Sony has already heard about this exploit, and is working on a new firmware to ensure too many people won't be able to take advantage of this flaw.
[Update: Now included a video, via MAXCONSOLE]