Just a short note, it is possible to convert any video formats to play on PSP using MEncoder. I don't know much about PSP but my friend has one.

mencoder input.avi \
    -oac lavc \
    -ovc lavc \
    -lavcopts aglobal=1:vglobal=1:vcodec=mpeg4:acodec=aac \
    -of lavf \
    -lavfopts format=psp:i_certify_that_my_video_stream_does_not_use_b_frames \
    -af lavcresample=24000 \
    -vf harddup \
    -ofps 30000/1001 \
    -info name=Title \
    -o output.psp

• Bitrate: it should not exceed 1500kbps, however, past versions supported pretty much any bitrate as long as the header claimed it was not too high.
• Dimensions: the width and height of the PSP video should be multiples of 16, and the product width * height must be <= 64000. Under some circumstances, it may be possible for the PSP to play higher resolutions.
• Audio: its samplerate should be 24khz for MPEG-4 videos, and 48khz for H.264.

Note that I found the original document from a thread mailing list.

Tags: psp, mencoder, mplayer