An open source and free alternative to PS Jailbreak (costing $169), PSGroove(PS Groove) has been released. It can be used to play backup games as well as run unsigned homebrew applications. PSGroove needs to be installed on a USB development board (AVR) which costs only about $20. It is far too cheap than PSJailbreak. It is compatible with AT90USB162, AT90USB646, AT90USB647, AT90USB1286, AT90USB1287, ATMEGA32U4( …and maybe more).
PSGroove can be downloaded from http://github.com/psgroove/psgroove (Without backup manager)
If you want a modified version with backup manager, download from http://www.ps3-hacks.com/file/83
You need either Teensy++ USB Development Board or an AT90USBKEY : http://www.pjrc.com/store/teensypp.html