eee... hmm... Well bboy_sonik did request a timeline of the hacking scene. It has been going on ever since the psp was released. Here's a quick briefing from my knowledge database:
June or July: The first homebrew hack was discovered called swaploit. This was designated for all 1.5 FW psp's. swaploit meant switching out the memory stick within a small period of time to execute the homebrew.
A few weeks later, they came out with the no-swaploit meaning you could run those very games on one memory stick without having to swap out the sticks.
This was mainly done by Killer-X and a few others. Killer-X was just one of the names I remember, there were a few others.
Sony had released 1.51 FW before this exploit came about (I think) and then 1.52 came out a little while after. Each FW with newer security, and supposedly a few crappy little "extra" features.
The PSP hacking scene (including me at the time) were working non-stop with huge ideas for exploits. Non were successful for a while and then there was talk of 2.00 coming to psp. with a web browser
So many people were psyched about the wireless web browsing without any form of payment. Tons were persuaded to upgrade.
A little while later (I dont remember dates :P) MPH came up with the 2.00 downgrader through an exploit in the new feature sony had added: The Tiff viewer in picture mode. The hackers were able to execute arbitrary code in a tif picture, and thus allowed homebrew to be run again!
Sony wasnt happy, and immediatly (3 days later) released a FW update again that patched the exploit. 2.01. (Who in their right mind would upgrade??) lol.
It was first the downgrader so you could downgrade to 1.5 and have homebrew once again, and later, the eboot loader was developed. It's still in beta today with the latest version: 0.85 since it can only be run in user mode. Kernal mode is like having root access to everything, but at the moment user mode (like guest mode) can only be used. The eboot loader lets you run some homebrew appz and games, but there is a few things it can't do such as run certain eboots.
anyways, Sony knew the hackers were going to do something about 2.01 soon, (not soon enough mind you,) so they released a little while later, update 2.5. They tried to persuade people to upgrade because it features a "location free" player. Sadly, you need to own the device that allows this which costs 150 bucks... So not too many people were persuaded, but lots were fooled into updating.
Sony noticed the upgrading wasn't going to well and hacking was coming along really well, so they released 2.6 featuring the RSS feed; Which is direct connection to the internet to listen to live music feeds (and video feeds? I can't remember).
Lots of people upgraded.
Now here we are, not even a week into the 2.01, 2.5 and maybe 2.6 exploit thanks to an exploit in a gamesave in gta. The only known homebrew to be run at the moment is the PSP3d's exclusive game, tetris on 2.01. Hello world! was able to execute on 2.5 and maybe 2.6, but is still in developement.
Thanks to fanjita for that hack!
In the end, we have developers, coders, and hackers working all the time finding new exploits every day and developing newer complex ideas on how to bypass the security. (I've heard they use a key and a checker: the key being 1028bit, and the checker makes sure that none of the coding in the eboots has been modified) You can talk to fanjita, or our admin Rob about this because they are both fantastic coders and developers.
Please correct me on wrong information here. All this is best to my knowledge and I've just woken up
...Willing to provide financial support for Firmware development. 
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