Where do you get your games from Johnny? 500mb is nothing O_O because most of my good games are around 1.2-1.8GB. eg MGS:PO is 1.29gb, gta:lcs is 1.16gb, svr08 is 1.66gb, manhunt 2 is 1.2gb, and the newst game I have is GoW which is 1.49gb
But anyway, downgrade your firmware first to 1.5. Use this guide;
http://forums.qj.net/f-guides-hacks-...are-90919.html If you are on anything above 2.50, you need to downgrade using Pandora's Battery.
Then, get yourself custom firmware. Follow this guide;
http://forums.qj.net/f-psp-firmware-...on-134053.html
With custom firmware, you can 'install' games.