the PSP has a built in PSone emulator its not 100% compatible with all games but most of them will work fine (even if sony havent released it for the PSP yet) but in order to load the games on the psp they have to be in the correct pops format as the custom psp firmware uses something called popsloader to alow these games to use the psp's built in emulator.
Man, a real portable PS3 would need a really heavy duty battery/power supply and some really intense cooling. That's for the ~80W newest Slim models, could only imagine what you'd have to do for the original one which ran at 200W. It's like double what the respective PS2 incarnations drew. Then PSOne only draws about a fifth of what PS2 Slim does, bringing you to a point where you can actually last a few hours with some big batteries.