A look at the bounty for native resolution PSP emulation on the PSVita through its built-in PSP hardware - ColdBird says it's possible to do and not just a pipe dream! -
Boot any PSP/PS1 game or homebrew right from Vita live area with ARK Auto Boot - Hackinformer
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All About PS Vita Hacking: VHBL, TN-V, Exploits and More