1- PSP games can be emulated on PS3 in 2 modes:
PSP Remaster or
PSP Mini
2- There is a PSP Launcher for each mode. They are included in webMAN MOD
https://store.brewology.com/ahomebrew.php?brewid=310
3- The compatibility of PSP games is relatively low. Near 60% are playable.
Some games are playable as Mini, others as Remaster.
Try the games with both launchers.
Many games show glitches, have issues with save or freeze after few seconds.
But the games that are compatible generally look better than PS2 games.
4- The UMD should be dumped as ISO 9660. CSO -a popular format on PSP scene- are not compatible.
5- The ISO should be placed in PSPISO folder at the root of USB, /dev_hdd0 or streamed by ps3netsrv
6- The USB can be FAT32, NTFS, exFAT or ext2/3.
FAT32 is recommended.
The other file systems require prepISO to detect them.