It gets even better! I am not sure, but I think the guy I bought this off might have had a play with it in the past - no wonder it is not past 2.81!
When I try to update, I get 'The system configuration of this PSP system does not appear to be correct. Blah Blah Balh'! (DRNFFFFFFD7).
I managed to update to 2.82, but I can't get it to 3.80, or 5.03!