Are the programs (Klik n' Play / The Games Factoy) open source? If they are, then it's possible, but if not, it'd probably be too difficult, depending on how they work. Do they create special files that you load up through the program, or do they generate .exe game files?
Maybe someone will come out with a similar program for making PSP games like you said, though.
Also, there isn't a port of Windows 95 for the PSP, just an emulated version of it.
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