Update: WAB MS Launcher v2.0 Alpha has now been released by WAB, however, the only indication of what has been changed or updated in this version is the ability to start/stop games. Please post all related feedback in THIS on-going Forum thread.
AloneTrio of the group WAB (who coded the World's first PSP Trainer) has now released the PSP WAB MS Launcher Alpha! Basically this utility can be installed using KXploit v1.50 and then used to launch extracted UMD iSO dumps from your PSP Memory Stick root, but as it's an Alpha version NO games have been confirmed as playable. There has NOT been a lot of testing done yet, however, most games will either begin to load the title/intro screen only (ie WipeOut Pure), will hang on "Now Loading" (ie Ridge Racers), or will hang at the "Please Wait" screen (ie Puzzle Bobble). Once again, at this time NO game actually plays via this Alpha version to our knowledge, but this is simply further progress towards that goal. The 'hanging' is likely due to UMD check routines being present, but only time will tell for sure!
In related news, we also received confirmation today from a popular Chip developer that a PSP Mod is expected to arrive in the near future. On the plus side it will allow you to fully run the iSO images from your Memory Stick, but on the minus side it will likely involve both forking over a bit of ca$h and opening up your precious $250 PSP console. More news on this as it becomes available of course!