You install custom firmware on it that allows you to play backed up PSP games and homebrew off of your memory card. I have seen hard mod chips before too, do the exact same thing but a lot more complicated.
its possible to mod your battery to a pandoras battery though which is needed for modding, that requires cutting open your battery and cutting a 'trace' on the chipboard. Its not too hard and ive done it a few times with no problem, the trick is not to slip with the knife otherwise theres a good chance the battery will overheat and explode in your face, or of course you could just buy one online.
If your new to PSP modding like i am, it might be a better idea to buy the equipment to mod your PSP. I bought it just because I bought a used PSP that did not come with a memory stick, and found a bundle for the battery and a mod ready memory stick for less than a new memory stick of the same size.
All the pandora batteries that ican find to buy are labeled as "unbrickers" said to make the psp start in development mode or w/e =p So I really need one of these and a magic memory stick if I want to play free games on my psp? =/
Yes, unbricker/pandora same difference, and you can make the magic memory stick yourself, there are plenty of tutorials around.
The developer mode allows you to install any firmware. The memory stick can easily be made using PSPGrader. Google it, easy and free.
