PSP to support MPEG-4 playback - Sony
We probably won't have movies on UMD from day one, but it looks like you'll be able to watch other things instead.
PlayStation Portable will be capable of playing MPEG-4 videos, Sony has confirmed on its Japanese website for the handheld, which is due for release in Japan on December 12th.
According to the website update, users will be able to download the video files to the Memory Stick Duo and played back in much the same way that MP3 music files can be copied and played on the PSP.
Because MPEG-4 isn't as widely supported as some video formats, Sony will also be supplying a trial version of the Windows-based "Image Converter 2" software from December 13th onwards so that users can convert other video formats. However, the company intends to charge extra for full use of the software.
In addition to playing games, MP3 music and MPEG-4 movies, the PlayStation Portable's multimedia functionality will stretch to Sony's ATRAC3 format, and it's the company's aim for filmmakers to release feature-length movies on its proprietary UMD format in future.