Look up a few posts and you will see directions in a post from iball (who appears to be banned(?) but also seems to understand what to do). In fact I'll just quote it for you

* Quasi-Wireless Play Usage
1) 1P: load the game you wish to play
2) 1P: In the CONFIG menu, set "2P Controller" to "Enable"
3) 2P: In the menu screen, press SELECT + START
4) 2P: Being within infrared distance, you can look at 1P's PSP screen and control the 2nd Player via your PSP
(Support is not yet built in for output on 2P's PSP screen)


...please look through the topic before posting...