I have seen 4 different PC Engine emulators for PSP, and some of them are very good!!! In my opinion the best choice is this one:
http://www.dcemu.co.uk/vbulletin/showthread.php?t=211768Zx-81 is making a great work, as he is porting the HuGo emulator to the PSP. The emulation is perfect in HuCard games, and it's very good in CD games. In fact, it is the only emulator for PSP that I know that is able to play CD games WITH SOUND!!! Furthermore, the emulator is in development, so it will be better in the future. Big thanks to Zx-81, as now we can test our PC Engine games everywhere
The emulator has a little bug in the sound of CD tracks (in fact, I am trying to discover exactly when it fails, in order to help Zx-81 to fix it) but you will see that the emulator is awesome!!
There are a couple of alternatives, for example the "E-mulator", the "PCEP" and the "HuE". I can give you some clues of these emulators, as I managed to get it work in my PSP, so if you are interested let me know.