Sony has released yet another firm ware upgrade for the PSP, taking it up to v2.5 in the US and Japan. (UK users will get it next year.) From the US download site, the main improvements seem to be the LocationFree Player -- which lets you watch TV and videos remotely as long as you also buy a separate Sony LocationFree Base Station -- and the ability to play copyright-protected video from a Sony copy-protected Memory Stick Duo. Neither of those sounds worth the effort. However, you can bet that v2.5 prevents users from downgrading to the v1.5 firmware required to run pirated software, and that some if not all desirable new games will soon insist on v2.5 being installed.
LocationFree is like the Orb system for Windows XP, which just needs a remote device that can stream "Windows, Real or 3GP media, such as WMP9 or above and RealPlayer 10 or above". That covers most Windows CE-based PDAs and mobile phones and a couple of dozen Nokias, etc. There's also DOT-Tunes, of course.
The ability to replay copy-protected video is probably of limited value because Sony's Portable TV system, P-TV -- where you download programs to the PSP for replay later -- is only available in Japan.