A few months back, Sony's John Koller broke to us that PSP owners who wanted a PSPGo would be able to digitally acquire those games for the PSPGo's built-in storage. Now Sony has reneged on that offer. Sort of.
Koller never claimed that users would be straight-up ripping their old UMDs into backups, but he did compare the user experience to Portable Copy. We imagined a scenario in which you'd sync a PSP to a PS3 with a UMD in the drive, then you could download a copy of said UMD for the Go after some online authentication.
But Sony recently told Kotaku that "We were evaluating a UMD conversion program, but due to legal and technical reasons we will not be offering the program at this time." However! (There's a however.) This development doesn't mean that PSPGo buyers with huge UMD collections will be screwed. Sony is developing a sort of UMD trade-in program in which you'll be able to swap an old UMD for a digital copy of the same game.
In other words, if you want a digital version of a game you own on disc, you'll need to give up the disc. [Kotaku]