Well, they did finally let you play WMAs on the PSP, anyone think that they'll ever allow WMV playback, in my opinion, it would be much nicer, as no one uses MP4 as a standard video file type. It would make putting anime on the PSP much simpler and memory efficient.
I think AVS Media has a converter that will let you pick what you want converted and it's free to use. You'll get a watermark in the middle of the image until you pay up. I use it on On The Spot because it seems to handle wmvs best.
As for PSP getting native support for older codecs....unlikely. Those are much less efficient space wise than mp4. Even Apple's video iPod only supports mp4.
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