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um i have a question for you, why would you post a idea for a soft mod on a hard mod site. Seriously.
Heavy software programming and hardware modding is required in that idea, its is very similar to the Hard Drive mod. You best option is to by a PS1 controller and mod it to the PSP, I am in the middle of writing a tutorial on how to build one. It is easy if you are some what experienced with modding
I am going to show how to do both, and where to route the wires ect. for each one
I just got the best idea to go along with your mod. If you don't do this I will do it if I do you mod. You ought to put a switch on the controler to change what the right analog maps, from the dpad to ^ O X []. This would be help full some fps's (I got the idea while playing metal gear solid portable ops) and in the n64 emulator.Thought this could help your tut get more views.