PSP-DEV released a Sony PSP Code Loader that works on Sony PSP Firmware 1.5 and below.

This tool enables users to run self written code that is not signed by Sony. The PSP homebrew code loader is based on a flaw of the Sony PSP firmware. The executable is only verified before launch and not at the point of execution. The tool uses this to swap out the executable before it is started. To use the tool two memory sticks are necessary. The download is 2MB and contains a manual in PDF format in English and Spanish.
The question remains if this tool is a step closer to run hacked games or is it just a nice toy for "good" hackers to run home made software on the PSP.
The PSP Code loader can be downloaded here. First seen on Engadget.

See also this recent report on UMD hacking.