Playstation Portable (PSP) files created with Disc Copier will not play on PSPs that have firmware revision 2.71 or 2.8.
In order to have your videos play back on your PSP device, you will have to create an MPEG-4 file instead of PSP option.
Launch Disc Copier from the Copy sidebar menu and then selecting Compile DVDs and Movies from the main window
Under Source, click Add Movies to add the clips you want to compile.
Under Destination area, go to the Format drop-down list and select MPEG-4.
To save the file on your hard disk, choose File/Folder from the Output to list and follow these steps:
Click the Save As button.
Use the Select Folder dialog to select a destination for your file.
Click the OK button.
To transfer the file directly to your PSP, choose Portable Device/Media from the Output to list and follow these steps:
Click the Copy button. The Select Copy Destination dialog appears.
Select a PSP, if you have more than one, and click the OK button. NOTE: If you disconnected your player from your computer, you will be asked to reconnect it so the file can be transferred.