Liam McNulty over on PSP Vault has put together a cool little chart showing the homebrew and official capabilities of the different firmware versions of the Playstation Portable. He also has a mean list of Q&As and a nice chart to help you figure out which Firmware's can be downgraded. It's a must read for anyone getting into the Playstation Portable Homebrew scene.
Guide Vault: Firmware and Homebrew Capabilities [PSP Vault]
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