Some people have trouble getting this to work so I thought I'll tell everybody how to set it up. I used Windows XP.
First of all
download Custom Firmware Extender if you haven't already.
Basic SetupExtract the contents to a folder somewhere. Copy the contents of the "release" folder into your memory stick.
Boot up the PSP into recovery by holding R when turning on. Enable the plugins under the plugins menu.
Setting up hostFind the "windows" folder that you extracted. Go to "driver" and copy "libusb0.dll" into the "windows" folder that you were just at.
Streaming ISO'sConnect the PSP to your computer with the USB cable.
Press and hold the note button, and press L. A menu will come up. Press home on "Usbhost Iso redirection".
A dialog will pop up on your computer screen directing you to install a driver for your PSP. Choose the option that lets you find the driver yourself. When it asks for the location, browse to the "windows" folder, then select "driver".
The drivers will install.
You are now set up. Place the ISO's in the ISO folder of windows.
To play, run "usbhostfs_pc.exe" in the windows folder. The hold down note and press L, then home like before.
If you need screens, please tell me. Also tell me if you think I've missed out something.
Note: If it hangs at the black screen when starting up, take the UMD out if you have one inside.