How do I turn files into a ISO that will work on the PSP?

PSP TYPE: Slim 2001
PSP Version: 5.00 M33

Also, is it true that a PSPgo can be permanently hacked now?

I might consider getting one since my 2001 has this nasty tendency to have the MMC stop working at inopportune times and an internal memory storage would help with this immensely. A used PSPgo is 99$ at Gamestop, which is funny because a 16GB Memory Stick Pro Duo is 60$.