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Step 1: Open the PS1 Iso.
Open it and you should find a bin and cue file. Now you should be wondering WTF how does this work on PSP just wait.
Step 2: This Is Where Popstation GUI Comes In.
Open Popstation GUI. You should see what looks like a game controller click that.
Then click the first browse button. Find the file of your PS1 game. Choose the CUE file.
Step 3: Get the New File.
Move the file with the new eboot to the Games folder in the Psp memory stick.
Done now go play that game.