Update #2: In related news today, PSP KDumper has been released, which is a simple tool and source to load in kernel mode and dump the PSP kernel memory and cop0 regs (pictured below)... along with a PSP Kernel Memory Dump Decrypted for those DEV'ers interested.

Update: Here are some pics of it in "action" for those interested: Pic #1, Pic #2, Pic #3. Basically you just start the PSP (v1.00) up, put in your UMD with the UMD Dumper utility's EBOOT.PBP file in the appropriate directory and press X to run it. It dumps the UMD automatically giving the screen confirmations (pictured above)... that simple! When it's done you'll have the UMD iSO image on your Memory Stick, and if you don't have a large enough MS it does do partial dumps but of course they wouldn't be much use other than to say "cool, it works."

A PSP UMD Dumper Alpha v0.001 has been released. Like all PSP utilities and emulator ports thus far, it appears to only support v1.00 firmware PSP handhelds at this time. Please post in THIS on-going thread from our PSP Chat Forum all related feedback on this news. When I ran it on my v1.50 PSP the only thing I received after clicking X at the Launch Menu was this Error Message similar to what all the other PSP "homebrew" utilities give me, but it's a nice work-in-progress for v1.00 users indeed with a picture illustrating the utility in "action" HERE! To quote from the release ReadMe file:

It contains an EBOOT.PBP file which, when run, will read an entire UMD into a file called UMD.ISO in the root directory of your memory stick.

No GUI on it, just some simple debugging messages:

UMD Dumper: Opening Memstick iso file for writing
UMD Dumper: Opening success
UMD Dumper: Opening UMD filesystem for reading
UMD Dumper: Wait for UMD drive to be ready
Don't Shutdown PSP

I'm a little afraid of $ony, but I want to give what Paradox did not.