If you use the Micro SD card to Memory Stick adapter it seems there really is no limit. But understand like any older CPU the bigger the folder the long it takes. I use 16 GB Micro SD cards in such an adapter and I get roughly 29 GB of usable space. It's been tested all the way up to 2 64 GB Micro SD cards and naturally you don't get exactly 128 GB after formatting. But you do get over 100 GB of space.
Another fact I have a couple of games I downloaded legally from the Playstation Store and I thought I see if they would play on a Modded PSP. As it turns out no they won't. Not even if you place the LICENSE folder in the PSP folder.
