A few thoughts.
1. Heard a bit about this. As far as I know, it's not really verified yet through any trustworthy channels, but it could very well be real. One thing you need to consider is that this is NOT a vita crack. This is a PSP emulation crack. Which is why it seems like it could be legit. The hackers have the PSP private keys. In order to run PSP games the Vita needs to use those same keys. There's no reason (assuming Sony lazied out (read #2)) that a program couldn't be modified very quickly execute the same way on the Vita's PSP mode as it does on an actual PSP.
2. If this is true, than Sony put no effort into their PSP library. Since there's no UMD and everything's being downloaded there's no reason why Sony would have to use the original PSP keys (well, other than they just couldn't be bothered to put new keys into the downloaded game code and Vita's PSP mode). Considering Sony's paranoia over piracy that would be a shocking oversight. (Though considering Sony's "security" in 2011 to this point, perhaps another "par for the course" might be more fitting after all). That could be one of the arguments that this might be fake.
3. Piracy didn't kill the PSP. The fact that 95% of the games released for it would have been better if they had been fleshed out and released on PS2 did. If you look at the DS's library, there are tons of games that could ONLY work the way they do on the DS. You put them on another platform and they either still work ok, but loose something in the translation, or they don't work at all. Most of the time I played PSP games, I spent thinking how much better the game would have been if it had been released on a real console and not gimped for a handheld.
4. Back to the Vita thing. If this is true, then I'm glad actually. It means that people will be able to dump their already legitimately bought and paid for PSP ISO's and put them on a card to play on their Vita. For no extra charge. You know, the way it should have been all along. Seriously, (for a couple publisher's anyway) I'd have to pay half again what I paid for the game originally to port it over? I'm sorry, but if this is legit, I'm not feeling too bad about the prospect of using this to play the games I paid for instead of paying some publisher $15 for the exact same version of a game I already own. Maybe if the game was updated and re-released for Vita... But the exact same version? Not feeling bad at all.
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