I put it in the .iso folder, of course! But I just now realized... what shows up on a UMD .iso in the xmb? Pic1 and icon0 for starters. Those aren't in a ps1 .iso lol.... so why WOULD it show up?
With the cwcheat pops and cheat both enabled it looks like just the .isos that freeze the system. Daedalus ran fine (but locked up when using the home button to get back to the xmb) and filer ran and exited just fine. Still a paint in the but, except that I haven't personally used cwcheat on a ps1 game anyway