Yeah, you can. Most of my PSP games were bought before I moved to Sweden, and I play a couple of games ad-hoc against friends with European versions of the games and it works just fine.
Yeah, I'm disappointed with the poor quality of the games released already on the PSP as well. The only really good games that I own would be Killzone: Liberation, Medal of Honor: Heroes, Daxter, and Hot Shots Golf: Open Tee. Do you see a connection between those four games? I see four unoriginal console rehashes of really good games before, which makes me angry because we really need some original games out on the PSP. Right now, I'm really looking foward to Crush, GRAW 2, Oblivion, and Ratchet & Clank. (hasn't come out across the pond yet...)
You could just be overcharging your battery. I normally don't put my PSP on the charger unless I see the blinky-light warning or if I'm about to go on a long trip or something. I don't know if you can fix the overcharging issue after you've done it already, though.
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