I am playing with the PSP settings, especially those particular to fw >3.30.

As you can see here: http://en.wikipedia.org/wiki/PlaySta...ystem_Software
It has now full MPEG-4/H.264 support for 720x480, 352x480, and 480x272 (native resolution).
However, I find it confusing for an average end user to choose the most appropriate resolution for its video in DVDFab's GUI. It's not easy, again for an average user, to know that your DVD widescreen video is 852x480, or that you have a letterhead DVD which will change it to... what? (see my point? ). This could be assisted
Also, for the destination resolution, in my mind you should favor 480x272 in your selection, as it is the native resolution of the device. IMHO videos look best at native resolution, even after transcoding.

Also, it would be really helpful if DVDFab would tell you what the native resolution of the video is, so you could make a best decision. I think i've seen this before, maybe in MeGUI or in GordianKnot with a simple assistant for this.

I was thinking that maybe there could be a radio box where one could choose between "keep original a/r" or "best fit to native device resolution" or something like that, that would make it easier for the end user.

I actually think this should be there for all devices, prioritizing native resolution (which the exception of PS3, which really does/should not care)