You can do many cool things with PSP homebrew, and in this instructable I cam going to teach you how to use your PSP as a joystick for playing games, but there is also a program that allows you to use your joystick as your mouse.
Here are the materials needed for this instructable:
EDIT: I made this instructable in December of 2006. At the time, 2.8 was the highest firmware that could be downgraded. Check PSPupdates.com
to see the latest version that is able to be downgraded.
A PSP that can have homebrew on it. ( 2.80 or lower firmware)
A wireless router or wireless access point that is already configured on your PSP via infrastructure mode.The PSP Wifi controller homebrew application PPJoy Total Game Control
All of the above are direct links to the download. Here are the websites for those three programs. PSP Wifi Controller PPJoy Total Game Control