Homebrew programs have been made for many systems, including PC (a lot of shareware and freeware falls in this category), iPod, Gameboy Advance, XBox, cell phones, and more. PSP homebrew has a growing and thriving community producing all kinds of interesting applications that can be run on a PlayStation Portable.
How is Homebrew Possible?
The first Japanese PSPs were sold with firmware version 1.00, which could run unsigned code (that is, programming code that was not "signed" or approved by Sony or a Sony-authorized developer). People soon discovered this fact, and PSP homebrew was born.
When the firmware was updated to version 1.50 (the version that the earliest North American machines were released with), homebrew was slightly more difficult, but thanks to an exploit it is also possible to run unsigned code on PSPs with this version. In fact, version 1.50 is considered to be the best firmware for running homebrew, as it can run all homebrews without major problems. (Unfortunately, many newer games require at least version 2.00 to run, but a way has been found to make a 1.50 machine look like a 2.xx machine to a game.)
Homebrew Countermeasures
Further firmware updates to versions 1.51 and 1.52 included measures to render homebrew inoperable, but a new exploit was discovered that works with versions 2.00 and up, but it requires the user to have a copy of Grand Theft Auto: Liberty City Stories. Machines with firmware 2.00 and higher can't run all homebrews, but they can run quite a few, and there are more programs created all the time.
Why Bother With Homebrew?
Many PSP users will be happy using their handheld to play commercially released games and movies, but there are always people who want more. There have been some interesting games developed by homebrew programmers, as well as useful utilities such as a calculator and an instant messenger program. More than that, homebrew can be fun, and it represents the ultimate challenge to an amateur programmer.
More on Firmware
The specific way that homebrew can be run on a PSP depends on the firmware version installed on the machine. If you're going to try out homebrew, the first thing you'll need to know is what firmware version your PSP has.
If you don't know what version of the firmware you have, follow this tutorial to find out.

