Converting PSP ISO files to PKG format for PS3 involves using tools like PSP to PS3 GUI or Ez PSP2PS3 to transform backups for installation on CFW or HEN-enabled consoles. The process generally entails converting the ISO to a PKG, transferring it via USB or FTP, and installing via the Package Manager, though using Webman to launch ISOs directly is a popular alternative. For a detailed walkthrough, watch this YouTube tutorial from YouTube.com YouTube.com
Based on community testing, these games convert and run excellently on PS3: psp iso to pkg converter ps3