Instructions
Empty your trash. If you have deleted saved files and have not emptied the trash on your device, you have not cleared up any memory--you have only reallocated it to a different part of the device.
Select "Home," "Settings" and then "System Settings" on your unit using your arrow keys.
Scroll through your "System Settings" options with the "X" button until you find "Format Memory Stick." Click "X" to select.
Choose "Yes" to confirm that you want to reformat the memory stick. The PSP will then reformat the stick removing all saved files and reformatting the stick back to its original memory space.
Plug your PSP or PSP memory card into your computer as another method of clearing your PSP's memory space. Once you have done so, select the appropriate drive letter, find the files you wish to delete and delete them as you would any PC file, or select "Ctrl" plus "A" to select all files and then click your "Delete" key.