Here is a detailed paper on the subject.
To install custom PKG files, your PS3 must be capable of running homebrew applications. You will need one of the following setups:
Games appear in the "Games" menu without needing multiman.
The tool automatically fetches the Game ID. You can manually add a Title, custom ICON0.PNG (the XMB game icon), and PIC1.PNG (the background wallpaper).
You will see your PS1 PKG files listed here. Press on a file to begin the installation. Wait for the installation bar to reach 100%.
A FAT32 USB drive allows you to plug in and play, or install games on demand.
