[Evan]

Well its kind of hard to explain, but Ill try.

Ok, well when game makers make a game, it needs to be signed with a code that was made by the console creator (In the PSP's case, Sony) or it won't be able to be played on the console. If an application does not have one of these codes, there are certain tricks you can perform to get it working. Several "Tricks" have been discovered.

Alright, that was kind of my introduction. Now here is what will probably answer your question.

Back when the PSP had firmware 1.00, it was discovered that the PSP could run homebrew software because the system had no way of checking if the application's code had been signed by Sony. A simpler way of putting it is: Homebrew is a game or application that does not have a code that has been signed by Sony.

So this just opened the door for all kinds of neat things to be run on the PSP, for example, NES games, garage door openers, TV remotes, etc. Now the reason the newer PSP firmwares do not support hombrew is because Sony has become wise to the whole hombrew scene and has blocked it from being able to be used. This is why many PSP users refuse to update, because they want to keep using homebrew.

Hope this answers your question. I'm not super knowledgeable on the subject because I am not a hombrew user, but I think I got the gyst of it.