yes mate,but there is an option in the recovery menu under configuration to play without a UMD disc in (NO UMD) but not all games are compatible with this option so i just leave a disc in, saves messing about.
yes mate, every ps1 game ive backed up has worked perfectly so far.
well i have converted a few but the only ones i have played so far are the crash bandicoot series(1,2 & 3) and abe's oddworld.
they play at full speed with no problems at all.
lastly as mentioned above is the recovery menu.
to access this turn you psp fully off by holding the off button up for 3 seconds or more, then hold R2 while turning it back on. this will take you into recovery.
here you can find some options like cpu speed, the no umd option and regional options. aswell as a few other's