That is hacked firmware. For a while, 2.71 SE (hacked, there are no letters after official firmware releases) was all the rage. It allows playing ISOs of UMDs. I haven't been on top of the PSP scene for a few weeks, so it could very well be that this 3.02 OE-B also allows homebrew and UMD emulation from the memory stick. (I don't know yet.)