iFunia PSP Video Converter can be used to convert your video and audio files so that you can play them on your Sony PSP. The supported output formats are H.264 and MPEG-4 for video and MP3 for audio. These are all formats that the PSP can play quite well. There are a few conversion profiles available, with different conversion options. The best quality that you can get on with this converter will be achieved if you use the 480p H-264 profile.
The application comes with a video editor that lets you trim and crop your videos and adjust some of their properties, such as brightness, contrast and saturation. It is quite easy to use, but it doesn't really perform too well when the file that is loaded is an HD video. The sound stuttered and video playback was sloppy with an MKV file that played just fine in MPlayerX.
There are a few different quality options available, but there is no way to know what they do to your files before conversion, and even after conversion, the differences are slight.
In my testing, I used an AVI and an MKV file. I converted the AVI file into MPEG-4 and the MKV file into H.264 (480p profile). The results for the first file were rather good, but the resulting H.264 file played quite slowly during the first few seconds. Also, as I noted above, the video editor also had problems playing this video.