Step 1> Make sure you have some images ready that are JPG files... nothing else unless you want to use Image Converter which isn't necessary.. just use paint to change it from one another...
Step 2> Make a folder named "DCIM" like with MP_ROOT outside the PSP folder without the quotes.
Step 3> Then inside the DCIM folder make a new folder named 101MSDCF
Step 4> Then get your JPG images ready and put them in the folder 101MSDCF with the name format (like the movie format Sony does..) as DSCXXXXX (without remove the .JPG part if you see it), which the Xs are numbers, for example my first picture (doesn't have to start off like this) DSC00001.
"To summarise and clarify a bit, you want to create the folder structure '[PSP Drive Letter]:\DCIM\101MSDCF\' (on the PSP). Drop jpeg images inside of it, and rename them to conform to this template: DSCnnnnn.JPG, where 'n' is a digit (0-9). This group of images will show inside the 'Digital Camera Images' group, in the Photo part of the PSP menu."