Our parents' little-mistake-in-Barbados, Kotaku, has a video of the new PSP 2.71 hack. The angsty, I'm-not-doing-my-homework soundtrack aside, you'll see that you can now run ISOs and homebrew apps off the memory stick.
Is there a hack to turn the PSP into a Nintendo DS? No? Oh, well we'll be over here with our New Super Mario Bros. then.
PSP 2.71 Firmware Finally Hacked [Kotaku]