Hacker whiz Fanjita has revealed that that his trick of executing code and other applications off the memory stick works cool with most of the latest versions of the PSP firmware, GAMASUTRA reports.

The whiz's program that he calls eLoader, works with PSP firmware versions 2.01 through 2.50. However, it is incompatible with the very latest 2.60 update.
According to GAMASUTRA eLoader works this way - It takes advantage of a flaw in the release of GTA: Liberty City Stories and disguises itself as a saved game file for the popular PSP title. Now, once somebody who owns a copy of GTA:LCS loads the saved file, it executes what is presumably some kind of overflow exploit, and can then load homemade software off of the system's memory stick media.
So in the battle between Sony and hackers, hackers have scored one point over Sony here. So far, Sony successfully combated unauthorized code running on the PSP by rendering the exploits invalid with a new firmware update which required the update be installed in order to run games published after its release.
Sony still may be ahead by a whisker with its very latest update, but then the hacker community will catch up sooner than later thus keeping Sony on its toes all the time.
Some interesting battle this.
Via: GAMASUTRA Thanks