Instructions
Switch your PSP off completely. Hold down the "R" button and turn it back on again. If you have custom firmware installed, this will boot the recovery menu of the system where you can modify the needed settings.
Use the d-pad to scroll down to the "Advanced ->" option on the menu and press the "X" button. Connect your PSP to your PC using a mini-USB cable.
Scroll down to "Toggle USB (flash0)" and press the "X" button. Click "Open folder to view files" when the autorun menu appears on your PC. You'll now be able to view the contents of Flash0.
Highlight all the folders in Flash0. Right-click and select "Copy." Create a new folder on your desktop called "Flash0_Backup" and "Paste" the folders you have copied in here. If anything goes wrong, you will have these files to revert to as backup.
Delete the files that you do not need on Flash0 to make more room. The "usbcam," "usbgprs" and "usbmic" files inside the "kd" folder can be deleted if you are willing to sacrifice (or do not own) the camera, GPRS and microphone peripherals for the PSP.
Open the "Font" folder and delete the Japanese and Korean font files. Make two copies of the " ltn0.pgf" file and rename these copies so that they match the names of the two files you deleted previously. This will fool the PSP into thinking that these two fonts are still available when in fact you have replaced them with much smaller files to free up space.
Open the "DIC" folder and delete the contents, or replace them with empty text files that have the same names. This folder contains the dictionary files for the Asian character font and is not important unless you change the language of your PSP.