Think of it as similar to flashing an Xbox mod chip BIOS, but it's a chip with only one bank (i.e. no bootable 'backup' BIOS). As far as I know, you should be able to flash the EEPROM thousands of times (someone please correct me if I am wrong!)... You just need to be certain that your PSP's battery is fully charged, as well as using the AC mains adaptor, that your memory stick is not corrupt, and that the data files used during flashing are not corrupt. If you're sensible, you should be okay, but I'd advise you to only make the up/downgrade when you really need to. As has been mentioned, the ideal solution is two PSPs, one for homebrew and one with the latest firmware for retail games.
bah, who cares? you can play 1.51/2,2.0 games with 1.5 and an umd loader, so you will totally be able to play those 2.1 games.
http://news.bbc.co.uk/1/hi/technology/2207229.stm "Owners of Sony's PlayStation Portable (PSP) have been warned about a malicious piece of software which can render the games machine unusable. The code is masquerading as a firmware patch for the PSP which downgrades the system from 2.0 to 1.5, said security firm F-Secure. In its blog, F-Secure said the software removes several important system files, making the machine unbootable. The patch is said to come from a group called PSP Team. " It seems in a lame attempt to stop people using this for homebrew they're blagging people into thinking the downgrade is some kind of malware!
It wouldn't suprise me one bit if Sony were behind this rumor. They literrally got screwed up the a** when the downgrader was released.
There actually is a trojan which will basically kill the PSP. It is mentioned by symnatec, so presumably they have tested it or disassembled it. http://www.sarc.com/avcenter/venc/data/trojan.pspbrick.html
Oh well, all this firmware upgrading will keep the hacker guys on their toes and give them something to do. Lets face it, everytime the current firmware is hacked to either downgrade it or just straight boot homebrew, Sony will be on the case and have a new version out. The simple answer: Use your PSP for retail games and get a GPX2 jobbie if you wanna play homebrew and emulators. At least Gamepark want you to do all sorts of cool things with their handheld. Yes, admittedly that's not the perfect answer but the next 4/5 yrs of the PSP's lifespan are gonna be a constant game of cat-and-mouse.