Instructions
Connect the PSP to the computer and then bring up the internal system's folders. To do this, plug one end of the USB cord into the top of the PSP and the opposite end of the cord into a USB slot on a computer. Press the left arrow key on the PSP until "Settings" is highlighted. From there, scroll down and click "USB Connection." Click "View all files and folders" from the window that will have then opened on your computer's desktop.
Double-click the "Music" folder to open the file that stores all of the music saved on the PSP. All music will be arranged in alphabetical order within this folder. To rearrange the music, right-click each song name and click "rename" from the list of options. You will then have the ability to adjust the title so that they will be ordered the way you like. The simplest way to rearrange the songs is to leave the song titles as they are and just insert a number in front of the song name. The list of songs will then be rearranged in the order of the numbers you insert in front of the song title.
Rearrange the music by creating folders for each different artist. Instead of having multiple songs by the same artist scattered throughout the music file, you can organize the music section of your PSP by storing all the songs from one specific artist into its own separate folder. Right-click the mouse in an empty space inside the "Music" folder. Scroll through the list of options that appear and select "New" and then "Folder;" a new empty folder will then appear. Rename the folder whatever you would like based on the artist or album name and then left-click the mouse into an open area to set the folder. Organize all of your music by dragging it into the newly created folders.