Dont know if there is one that runs on PSP but here is a link to a thread that explains about PC desktop versions. http://forums.afterdawn.com/thread_view.cfm/480772 I personally use UMDGen V4. Never had any problems with it and found it very easy to use. Hope this helps.
I use Winnydows ISO compressor. Never had any problems with it. Except you have to have Windows Framework 2 of something.
Aww to bad. =\ All my posts could be rainbow colored! Wow did I really just conceive that in my mind? Please get the bricks and pillow cases or ban hammer I need that beaten out of me.
umdgen is a good software for iso and cso compression. u can compress ur iso to cso using it. u can compress it upto 9 level but i recommend not to compress too much because movies and other vidoes will be cut.