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1.Is the custom firmware still required? If yes, what is the newest firmware capable of running PSX games?
yes it is... and that would be 5.0 M33-3
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2. Do I still need the hot shots golf for that boot file?
yes and no...depends on which psx2psp game creator you use
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3. If I want to play multi-disc game like final fantasy, do I need to have each disc on separate card?
latter firmwares handle multidisc games... thus you would not need to have them seperately ( they would make one big eboot ) however i believe there is some trouble with the compatibility for that game in later pops... dont hold me to it though ;)
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4. Do saved games overwrite each other? I plan to use dosbox and many old PC games, but if the savegames will overwrite each other, it will be pretty annoying, I heard it somewhere..
i wouldnt know the answer to this one...so sorry about that
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5. I recall reading about troubles with PSP with TA-082 motherboards, is it still something to watch out for?
those boards are phat specific... and the TA-082 got hacked loooong time ago
the one you need to watch out for is the TA-085v3 board ( thats the latest psp slim ).... anything bellow that and you are okay :D
i hope that helps answer most of your questions.
Thanks for Everything,
PSPdemon