Instructions
Insert another memory card into the PlayStation Portable to determine if the problem lies with the particular memory card or the handheld itself.
Inspect the memory card's two metal tongs for any physical damage. If the tongs are bent, the memory card is broken and cannot be detected.
Navigate to the far-right of the PSP's home menu and select the "PlayStation Network" icon to connect to the Internet and automatically update the firmware. Updated firmware solves a great deal of incompatibility issues.
Navigate through the PSP's main menu to "Settings" and select "Format Memory Disc." Once the memory card is formatted, your PSP will be able to recognize it.