The main benefit of hacking your PSP is being able to run homebrew. There are NES, SNES, Genesis, etc. emulators for the PSP, which is awesome. But custom firmware also enables lots of custom settings, some of them performance oriented, others convenience oriented.
There have been some really good threads on PSP hacks and custom firmware in the past. Here's one of the best:
zerothread?id=389296
If you're just after playing UMD games, custom firmware won't make much (if any) difference for you. But if you want your PSP to do more, that's when you want to look into custom firmware options.