Step 1-
Ensure that your PSP has been switched off, and connect it to your computer. A USB cable is needed to be able to do this. As soon as you have made the connection, switch the PSP on.

Step 2-
Pick up the PSP and go into the settings menu. As soon as you are there, push the X button, which links the PSP to the computer. You may have to wait a bit for the computer and the PSP to recognise each other, but as soon as it has happened go to the computer and look in ?My Computer?. Your PSP should now be visible, just as an external hard drive or something like flash memory would.

Step 3-
Still with the computer, go into the PSP, access the memory stick, and open the folder titled ?PSP?. As soon as you are in there make another folder, and call it ?MP_ROOT?, and another one which should be called ?100mnv01.?

Step 4-
Before you can watch movies on a PSP you need to convert them to MP4 format. Later on in the article, you will find out where to get software for converting DVDs to MP4s. As long as you have the MP4s saved to the computer, all you need to do is save the MP4s that you intend to watch into the folder you just made called ?100mnv01?. As soon as that is done, you just need to click on each movie inside that folder, with the PSP itself, and they should start playing from there.

That is that you have to do to be able to watch movie on PSP. The only other thing you will definitely need is some software to rip the movies from the DVDs and convert them to MP4, and you will find a link below which will take you to a page where software like this is reviewed. The ones which have been reviewed here not only convert to MP4, but they also let you download unlimited PSP games as well!