Here is a blog post with some tips on doing more with your PSP than just playing games, like watching videos, listening to iTunes music and playing Flash-based games. They even work for updated PSP firmware (v2.7)

First of all, this article won’t include anything “homebrewed” so if you dumb enough to update your PSP to v2.7+ (me included) you’re very lucky to find this, there is one downside, for most of the tricks listed here, you’re going to want a big memory stick, there’s a few counterfeits on eBay (2GB for $89 – actually works, I bought one, fills up to 2GB), or you can take out the cash and buy one from Circuit City or Best Buy.