Lets say that there are two kids, who buy two different games from the psp store and save it onto their memory cards. Can't they copy that game file from their memory cards and give each other a copy of their game file? Is it possible?
If it's like how the PS3 one works, yes. I think it's tied to a PSP, but if you login to the same account, and download it through the account that already did, you can download it on a different PSP. You can only do this either 3 or 5 times, I forgot.
I don't really see the need since you can pirate just about anything... If it really is true, then you can download someone's copy of a game off of the internet and play it directly. If not, then some sort of hack was involved to allow that.