Introduction
What is a modded PSP?
A modded PSP is a PSP with a "Custom Firmware" on it. This means instead of maybe 5.00 firmware, you have a 5.00 m33-4 firmware. These "Custom Firmwares" are like a mirror image of the original firmware, and carries out every function of the original firmware.
What are the advantages?
There are a lot of advantages. So I'll explain the main idea of it.
When Sony released the PSP with version 1.0 firmware, it was possible to run your own games and Eboot files out of the "game" folder. When Sony released version 1.51 of the firmware, they finally disabled all "Homebrew". The only games then that could be run were official updates and demos. Then Dark Alex, a pioneer of PSP modding, released his first firmwares, called X.XX OE (ex 3.06 OE) OE standing for Open edition. Here is a short quote from Wikipedia to save me writing
"Dark Alex's work for the PlayStation Portable
includes custom firmware, also known as "Open Editions", that allow the
running of unsigned code such as homebrew applications and UMD backups, as well as specially converted PlayStation games.[2].
In July 2007 Dark AleX officially stopped his work on the PSP, citing perceived problems with Sony as one of the reasons for his departure. [3] Some people even suggested Dark AleX was being paid by Sony not to release any more custom firmware, but Sony denied this[4] and it was later revealed that Dark Alex was "Team M33", who continued to make custom firmware."
Taken from www.wikipedia.com/Dark_Alex Note: If it is not a valid link, that means it has been merged with the
"Playstation Portable Homebrew article"
That about sums it up very nicely. Not that you needed to know that, but it's good to know. The new firmwares releases by "Team M33" are called X.XX M33-X (Ie 5.00 m33-4). These new firmware are very stable. the M33-X stands for the release version meaning
M33-1 Is the first release
M33-2 Is the second release, probably adding features, or fixing bugs.
M33-3 Is the third release and so on
I recommend 3.71m33-3 and above. This tutorial will install a lower version, due to what I believe is a better "Magic Memory Stick. Don't worry about it for now, I'll explain it later.
There are several techniques to downgrading and upgrading a PSP.
The best 2
"Pandora's Battery" (otherwise known as "JigKicking" your PSP or "Pandora's Jigkick")
and
Using an Upgrader/Downgrader for you PSP (only works with select firmwares on a fat PSP)
If you have a PSP with 1.0 or 1.5, you can simply put the Modded firmware on it.
A select few firmwares can be upgraded or downgraded. If you have firmware version 1.51 to 3.11, you can upgrade to certain official version, then use an upgrader/downgrader. The "Pandora's Battery" work for ALL firmwares.
So first I will show you how to make and use the "Pandora's Battery" and the "Magic Memorystick", both required for the Pandora technique.
I will write this tutorial in Layman's terms, and make as easy to understand as possible. I had to read Geek to learn how to do this a while ago, and I don't speek Geek and I'm very certain most of you readers don't want to read Geek. If you have any problems understanding any of this, if any information here is wrong or out of date, or I made spelling or grammer errors I missed (I hate writing) fell free to Email me at syntaxvgm@yahoo.com. I will update this article accordingly or answer your question when I have time. I highly suggest reading this article a couple of times before doing it.
Overview: The Pandora's Technique
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DISCLAIMER:
IF DAMAGE IS DONE TO YOUR THINGS, INCLUDING YOUR PSP, YOU ARE RESPONSIBLE AND BY FOLLOWING THIS GUIDE YOU UNDERSTAND THERE ARE RISKS. YOU ARE ALSO RESPONSIBLE IF YOU DO ILLEGAL THING WITH THE MODDED PSP, INCLUDING HACKING, COPYRIGHT VIOLATING AND BOOTLEGGING OF ANY KIND.If you follow this guide completely and carefully, nothing go wrong.
But, as Forest Gump says:
"S*** happens"
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The Pandora's technique consists of making a "Magic Memory Stick" and a "Pandora's Battery". Once both of those are completed, you will put the battery and the stick in the PSP, turn it on, and it will install the custom firmware. This guide will be for slim PSPs and will install 3.71 M33-2 and upgrade to 5.00 m33-4.
Making the "Magic Memory Stick"
You will need
-A compatible PSP
(compatibility check later in guide)
-A USB Cable for your PSP
-A PC with Windows XP (Windows Vista wont work with this method due to Command Prompt issues)
-A Sony (Magicgate) Memory Stick that is MINIMUM of 128MB and MAXIMUM of 4GB (I hear the Sandisk Memory Sticks work too, but I have yet to test them)
-You need to download this:
Magic memory stick.rar(Note: I gave it as an RAR file. If you don't have an RAR extractor, I suggest you use WinRAR. To download it go to
http://www.rarlab.com/download.htm and Click WinRAR 3.80 or whatever version at the top of the page. Install it.)
Extract the .rar file you downloaded

Right-Click on the RAR file and select "Extract files".

Enter the path you want it saved to (do not change if you want it where the RAR is located) and press OK
It will then convert the RAR to a Folder with files in it.
That folder should be named "The files you need" or "Syntax magic memory stick". If it isn't, dont panic it perfectly fine.
Open it.
The open the folder "Copy to Computer"
Highlight the folders msisnst and mspformat. Copy them to the root of you C drive ie "C:\msisnst" and "C:\mspformat."
Next format your memory stick through you PSP.
Go to
Settings-->System Settings-->Format Memory Stick
Select Yes
WARNING: This will delete everything off of your Memorystick, so backup you Memorystick if you need to.Connect your USB cord and Select "USB Mode" under settings on your PSP.
Take notice of the drive letter. This is usually E of F. In my case it's J.
Open up Command Prompt. This can be done by clicking on "Start" then "Run" and entering cmd. (also in accessories folder under programs)
You should get a black window that says "Microsoft Windows XP [Version X.X.XXXX]" (X's being the version).
Then there should be a second line with a cursor by it.
Type "CD C:\" (no quotation marks)
Press ENTER
Type "
mspformat\mspformat.exe X" (no quotes and replace X with the drive letter of you PSP
)
Press ENTER
You should get this message:
"You are about to format drive X.
All data will be lost. Do you want to continue? [Y]"
Tpye "Y" and press ENTER (no quotes, again)
It will then say "Drive successfully formatted, and partition moved."
(note: if this doesn't work right, and you are running Vista, It's because you need XP. Make the "Magic Memorystick" on a PC with XP.)
Exit "USB Mode" on the PSP and take out the Memorystick. THIS STEP IS IMPORTANT. YOU MUST DO THIS, EVEN IF IT SEEMS UNNECESSARY.
Re-insert the Memorystick and enable "USB Mode" again.
Go to the place on you computer where you extracted "Syntax's Magic Memorystick"
Open the "Despertar" folder and copy the contents, not the actual folder to the root of the Memorystick. (ie F:\)
Now go back to your Command Prompt window (if you closed it, just open a new one and type CD C:\). Type:
"msinst\msinst.exe X msinst\msipl.bin" (no quotes, replace X with the drive letter of you PSP)
Press ENTER
Type Y and press ENTER
The last line should say "Write MS BOOT CODE". If it does, congrats! you have made a "Magic Memorystick".
Once you are done modding the PSP, the Memorystick can be formated to be used again, or just delete the files yourself.
Now its time to make the Pandora's battery.
You will need:
-A PSP 2000 series
-A slim PSP-S110 battery
-A box cutter or a pocket knife
-Scotch tape (recommended)
The PSP 3000 is not compatible!!!
Before you do this step and waste a battery just to find out your PSP is not compatible.
How do I know if my psp is the new, PSP 3000?

The one on top is the PSP 2000 series, PSP 3000 under. The PSP 2000 has the PS logo on the top left hand corner, while the PSP 3000 has the Sony logo there. If your psp is a 3000, it is NOT compatible.
Now lets check for the TA-082 motherboard. Open you UMD drive.
Look at the top right side corner. The PSP 2000 has nothing there. If you can read an upside-down "IC1003", it is a TA-082 Motherboard. If you can't read, then you shouldn't be doing this. And you can read, seeing that you are reading this.
TA-082 Motherboards are not compatible.

UPDATE: Please read this guide taken from pspmod.com some new slims are not compatible. Use this guide to check your motherboard compatibility. I originally had this as a link, but I'm getting people emailing me asking why their PSP won't work with this. Original guide posted here.
READ VERY CAREFULLY
1)
Psp 1000 aka phat-all of them are hackable.So dont ask that i have a phat with 5.02 ofw blah blah...
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~
2)
Psp-2000
aka slim and lite aka slim-Older slims are hackable and extremely new
slims are hackable too.The psp that were manufactured during late
summer and few months later are not hackable.
Reason for this:
The ta-88v3 mobos cant be hacked yet but the ta90v1 can be hacked.So
the very new PSP can be hacked but chances that u get those are LESS..
Following criterias can be considered:
1)The firmware psp came with.
2)Serial code below the battery
3)Box Code and limited edition bundles
4)New box type serial codes
5)DA's TA-88v3 identifier
6)Date code
1)The firmware your psp came with....
If its a 4.01,the chances that u can hack your psp is very
low...because sony manufactured ta-88v3 mobo when the 4.01 was their
main firmware....
i dont have any idea about what firmware ta-90v1 ships with so if anyone knows plz let me know....
2)The serial code:
Psp-2001 with HU2 most probably has the ta-88v3 mobo.....
I personally dont think this is true .
so its better to overlook it.....
The serial code is located below the battery.
3)The box code and limited edition psp:
(No Letter) = 3.60
A = 3.71
B = Unknown
C = 3.72
D = Unknown
E = 3.80
F = 3.90
G = 3.95 (TA-088v1) / 4.01 (TA-088v2) / 4.01 (TA-088v3)
I got a pic of this from somewhere longtime ago:
This is the best way to know whether u have a ta-88v3 mobo if u have a psp with old box type.
Limited Edition packs:
Daxter Limited Edition Pack (TA-85v2/3.80 OFW)(CONFIRMED)
God of War Limited Edition Pack (TA-88v2/3.95 OFW)(CONFIRMED)
Madden 09 Limited Edition Pack (TA-88v2/3.95 OFW & TA-88v3/4.01 OFW)(CONFIRMED)
4)
New box types dont have the box codes as above but instead have a serial no. starting with AB.
See below:

Here if the code has AB01 in its initials then the psp is hackable
but if the code starts with AB02 it cant be hacked...
5)
The ta-88v3 identifier by DARK ALEX:
This is will clear all your doubts whether u have a ta-88v3 mobo or not:
http://dark-alex.org/88v3id.rar
download it
Follow this steps then:
First Step: You need to format your memory stick with the app called "mspformat" that is included.
- Connect your PSP via USB.
- Format it using the command "mspformat E", being "E" the letter of your PSP on your PC.
- Program will ask you to confirm it, press Y.
- Plug out your PSP. IMPORTANT: DO NOT format again the MS within the PSP until this test has finished.
- Connect again the PSP via USB, and manually create PSP and PSP/GAME folders.
Next step must be done on a PSP homebrew capable (with CFW). If you
don't have it, ask someone else to do this step and give you the
resultant files.
- Copy the GETIPL folder to PSP/GAME. Get the 3.90 and 4.05 updates,
and put them onto the MS root with the following names: "390.PBP",
"405.PBP".
- Run the GETIPL app from your PSP homebrew capable, and it will create
a couple of files on the MS root, called "ipl390.bin", "ipl405.bin".
- Connect the PSP via USB, and use the "msinst" program that its included on the pack to install the 3.90 IPL on the MS.
- You must do it this way: "msinst E E:\ipl390.bin", being "E" your PSP
letter on your PC. Program will ask you to confirm it, press Y.
Insert the MS with the 3.90IPL installed onto the PSP that you want to
confirm if it's a TA-088v3 or not, and turn it on with a Pandora
Battery plugged in. You'll have two possible results:
- PSP turns off inmediatly after starting - Your PSP is NOT a 88v3.
- PSP keeps turned on with a green light forever - Your PSP is a 88v3,
or you have done something wrong. Next step will confirm it.
- Connect again the PSP via USB, and use again the msinst, but this
time with the 405IPL. Remember, "msinst E E:\ipl405.bin", being E your
PSP letter on your PC.
Try to load it again with a Pandora battery. You have two possible results:
- PSP turns off inmediatly. If PSP turns off inmediatly with this IPL
and on the other test it had that green light forever, it will be 100%
sure a 88v3.
- PSP keeps with a green light forever. This CANT be on any PSP, being
88v3 or not. If this is the case, youve done something wrong.
6)Date Code:
This codes are usually never present on japanese and american psp.
They are found just above the serial code under the battery that is it if it is present in ur psp....
I dont have a pic but if somebody has it plz give it to me....
if its 8c then u cant hack ur psp...8b can usually be hacked....
Finally the psp 3000 aka brite:
These psp are the most candy ass psp ever manufactured

The gripshift exploit has been discovered and soon the psp 3000 will be
cracked..[ITS ALMOST CRACKED] but its good to avoid them until they
fully cracked....
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IF YOU HAVE A SLIM BATTERY
Look at the back. the Model should be PSP-S110. At the bottom It should say "Made in China" NOT "Made in Japan." Although the new Japanese batteries are not common, they are made to be "Pandora Proof" and cannot be used as a Pandora battery.
If your PSP and battery meet the requirements, continue.
Cut your battery open at the seams on the side. DO NOT RUSH. Take it slow. This took me an hour. That little battery is stubborn. (whats odd is the fat batteries open good)
Once you are done cutting, open the batter and you will see this.

Then FOLD the chip out, like this

Now locate the IC04 chip. It is the smaller black thingy. It has 4 pins on eacch side. THIS IS A NEW AND EASIER METHOD!!!
Look for the 4th pin at the top side of the chip. Follow the line that extends off of it. ( It has the number 19 on it)

Cut the line about where this picture shows (blue arrow) It doesn't have to be exact, but close so you don't cut anything important. Cut it deep enough so you're sure the gold line is severed. Fold the chip back in the battery and put the battery back together. Tape it with Scotch Tape (use scotch tape so it fits in the PSP with the battery cover). Put it in the PSP WITHOUT THE MAGIC MEMORY STICK. The green power light should go on. on flip the switch. If nothing happens, or the screen goes blank it means the PSP is in service mode you have successfully made a "Pandora's Battery"!!!
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If you have a Fat battery
Making the fat Pandora battery is much the same, with a few differences.
First off, the fat is MUCH more easy to cut open.
Cut the battery open at the seam. If you get a battery with the board on the front, your battery is good. If you get one that has the motherboard on top, your screwed.

If you get on like this, just put the battery back together, then tap it together with something thin like scotch tape.
That is frustrating, I know because I have one like that. If you have one, buy a premade Pandora battery offline, which you can make into a normal one for about $10-20, or buy a new $40 battery from the store, just to cut it open and make it into a permanent Pandora's battery (not the better choice).
If you get a battery that does not look like this, you're in luck.
Cut the 5th pin on the IC04 chip as the picture shows.
Cut the pin with a pocket knife, or a box cutter. Put the battery back together. Tape it together with Scotch tape. 
Put it in the PSP
WITHOUT THE MAGIC MEMORY STICK. The green power light should go on. on
flip the switch. If nothing happens, or the screen goes blank it means
the PSP is in service mode you have successfully made a "Pandora's
Battery"!!!___________________________________________________________________________________________________________________
Installing the custom firmware on the PSP
You will need:
Compatible PSP- See the Pandora's Battery guide above for which PSP's are compatible
-Pandora's Battery
-Magic Memorystick
Charge the Pandora's battery. Put the Magic Memorystick and the Pandora's battery in the PSP. Put your charger in the PSP and plug it into the wall. Turn the PSP on. You will get a bunch of code for a second. Then it will stop and say (in the middle of the screen) "press X to continue" Press X . After it's done it will say something like "Press X to install custom firmware X.XX m33-X" (X standing for the version)
and "Press O to install original firmware X.XX" (the version here will be the same as the custom one) Select the custom firmware.
It will install for a while. Then it will say press X to restart. Make sure the charger is plugged in and take the "Pandora's Battery" out. Press X. It will restart.
CONGRATS! YOU HAVE HARDMODDED YOU PSP TO INSTALL A CUSTOM FIRMWARE.
If you want to update to the latest version, press the network update icon, and it will do it automatically.
If you want the recovery menu, turn the system COMPLETELY off by holding the switch for 3 seconds. Turn the system back on while holding the R triger.
Article Created by SYNTAX, technique by TEAM M33
More tutorials coming by me including how to use the CFW and how to put FULL GAMES on you memorystick!