The easiest and quickest way to convert videos into PSP Video Format would be to download a proper PSP Video Converter. Most of these programs are free to download and they are easily able to convert all types of video files into Mpeg-4 at the click of a few buttons. Leaving you with only having to upload the videos onto your memory card and begin watching!
You could attempt a common 3-step video conversion for converting DVD Movies, but it is rather complicated and only recommended for advanced users. It requires downloading a few different programs and then going through a series of lengthy steps to get the conversion done. It is very time consuming and can become quite annoying if you have a lot of movies to transfer.
Hence your best option would be to download a good PSP Video Converter and let it automatically take care of the conversion process without you having to worry. One particular program I would recommend is Cucusoft PSP Video Converter Suite, it is very easy to use and Free to download (check the link below for download…). Plus it allows you to convert all types of video files (divx, xvid, avi, moeg, flv etc…) so no matter where you downloaded your movie from you will able to watch it your PSP.