Its possible... and very easy I might add to squeeze a couple extra k outta your memory card saves. This may be general knowledge at this point but I may as well state it for the newbs anyways.
When you connect your PSP via USB you get into the folders for game saves / music / video etc...... When you go into the game saves they are multiple files, not just the saves themselves. Youll notice all games have a "ICON0.PNG" file and some have additional files. For instance Dynasty Warriors has:
DATA.BIN: This is the actual save part of the folder
ICON0.PNG: This is the icon that you first see when viewing the game save in the game save viewer before labeling it.
PARAM.SFO: Call it the glue that holds it all together, remove this and the file goes corrupt until you put it back in.
SND0.AT3: Definitly an atrac-3 file, music that begins playing when you label the game save
ICON1.PMF: This is a short movie in PMF format that plays when you label the save.
These are all the files that I have run into on my games. Here's the catch to this info.
You can delete all but DATA.BIN and PARAM.SFO and the saves still work... meaning you save a nugget of space.. in the case of Dynasty Warriors thats half a mb per game save (youll probably only have one though)
Your other option is to replace those other files with custom files to show off to your friends. Just remember to make little folders for each game on the desktop and store the originals there.
Some general rules of thumb
The new files must match name with the old ones, therefore the old files must be moved to the PC if you want to save them.
DONT TOUCH DATA.BIN or PARAM.SFO IF YOU WANT THE SAVE TO WORK!!!
You can convert pretty much any image file (jpeg, gif, etc) into a PNG file... just do it through bitmap, but remeber the resolution for Icons is 144 X 80 and backgrounds is 480 X 272. You can be a little off but don't over or under do it cause it will look funny.
I havent done any testing with PMF files but I imagine if you find a converter it will transform just about any video to PMF.
You can also drop in a atrac-3 file song into the file if you want, just name it the same as the existing one.
I have not found anyway to make a file execute when there isnt an original i.e. there is no sound file or movie file that plays during untold legends file save, therefore I would not know how to make one exist. I have only been able to swap out existing files for new ones.
(UPDATE) I must have never tried it because I recently added music and a video file to a save that had previously never had it. Good news indeed!!
Neat trick though.