After hours of trial & error I figured out the issue for mine, i came across your post & if you still check on here I hope this helps you.

1. Use WinFF to convert your files (it takes some time to do so). If you need to DL it just google it.

2. You want to select the conversion type to Xvid for PSP either 4:3 or 16: will work

3. Just drag & drop the converted file into your video folder & then go to your videos & it should work.

Hope that helps you out, if not enough detail just post again & I'll try to give more instruction.