Things You'll Need
Instructions
Download the PSP Generator program and double click the "UMDGen.exe" file to start the program. It is a portable program, so it doesn't need to be installed.
Drag your PSP ISO file into the PSP Generator program's open window. The program will automatically load all of the ISO features into the program without you needing to select anything.
Click the "File" button on the top left corner of the program windows, and click "Save as." Click "Compressed (.CSO)" from the small menu that appears. Click "9" for the compression rate.
Name the new compressed ISO file--now a CSO file--to whatever the game is and click "OK." The ISO will be compressed and saved onto your desktop. You can now replace your ISO files on your PSP memory stick with the CSO files and save valuable space.