Get Lumines! It's damn addicting and very long-lasting. And I think you can get it for $20. Other nice games are Daxter, LocoRoco, Megaman Powered Up, Wipeout Pure and Pirates! just to name a few.
I don't have experience on that program, but pspvideo9 is really easy-to-use and it's completely free. :)
Yes it is possible, but you'll have to convert it to mp4 format first using a program called pspvideo9.
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