From The Neuros Technology Wiki
How to put video on the PSP
There are several ways to get video on the PSP. Among them are several software solutions, and the Neuros R2 video recorder. The Recorder 2 is unique here because there's only one step between analog video to your PSP, which makes it quite a bit faster and easier, as well as more versatile. Here we are collecting tutorials on how to use the various methods. Please feel free to edit these articles or contribute a tutorial on your own favorite method, if it's not included here. Below is a table showing the relative aspects of each method.
About the PSP: The PSP is a handheld entertainment system, designed for mobile gaming and video-watching. It boasts a 333 MHz processor, 802.11b Wi-Fi and USB 2.0 connections, Memory Stick PRO Duo reading, an IR receiver, and a 480 x 272 pixel screen. It uses a proprietary disc format, the Universal Media Disc, or UMD, which can contain games, movies, or audio. The PSP will play back videos encoded on UMD or in MP4 SP, AAC, up to 76,800 pixels, which does not allow the full native resolution of the device.