I never got why people used devhook to run their isos/csos. I'm actually not quite sure what it even does... why don't you just used custom firmware to run them instead?
well if you're using custom firmware, I suggest you just take the iso/cso, put it in the folder called ISO in the root of your memory stick, then disconnect the usb cord, find the game in the game section of the XMB, and play it. Should work fine.
No, MP_ROOT is just a folder. The other thing you said is the root. It's sometimes referred to a "ms0:". In your address bar it'll always have a letter, and then ":" (F:\, G:\, H:\, etc.). Sounds to me like you already found the ISO folder, so go ahead and put the file in there.