Homebrew games, many of which are really fun and well made (Super Mario War, PSP Dungeon)
Ports of classic open-source games (such as Quake and Doom II)
Custom backgrounds, waves, and fonts, icons
Unlocked 333mhz mode allowing you to play all PSP games at smoother speeds
Plugins, such as screenshot support and in-game music players
Recovery Menu, preventing you from causing any damage to your PSP's internal flash
Removes the restrictions Sony puts in place on it's PS1 emulation engine, opening the door to a huge library of PS1 titles
Allows you to drop the CPU speed of the PSP, saving battery life in games that don't require much processor power
Allows you to use the 4th brightness level
You can change the region of your PSP, opening up the ability to watch foreign films and access japan-specific features
You can lock your PSP, preventing people from accessing it without knowing a specialized keystroke
Keyboard support
Custom Firmware does not limit your ability to play new games or special beta games
You can control your PC or Mac from your PSP using VNC
You can run other PSP firmwares from your memory stick using Devhook, rendering your PSP effectively brick-proof
Thanks to the Recovery Menu, custom firmware is significantly safer than Sony's official firmware
You can use a homebrew chat program to talk to all major chat networks without having to go through the web browser
You can use your japanese GPS system with a homebrew map reader to get GPS access in the states
You get all of the features of Sony's firmwares... there is no downside.
What is XMB? What does it have to do with the PSP?
XMB stands for Cross Media Bar, and is a graphical interface that's shaped like a cross. Users of the interface move left and right to select between main category entries, then move up and down to select between sub categories.
On the PSP, the main categories include "Settings", "Photos", "Music", "Videos", "Games" and "WWW". Subcategories for "Games" include the Game Sharing Feature, UMD, Memory Stick Contents and Games on the Memory Stick.
