First post in a while but I'll try and post more regularly. Rumours of a PSOne emulator on the PSP? I think it is a bullshot; look at the game list: Final Fantasy VII. Even assuming they then put in redevelopment time to compress it to a single install (instead of three disks). I can't see it kicking in at less than half a gig (remember CDs are still quite large compared to Flash Disks) and you'd need a big chunky memory stick to store more than one game. Then again; maybe Sony hopes that you'll go out and buy a nice range of memory sticks to hold your games on.
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