To install firmware 2.0 for the PSP connect your psp to your computer.
Open up the folder called PSP on your psp. if a folder is not already
created called GAME create a new folder and call it GAME (must be in
all caps) open the folder GAME and create a new folder called UPDATE 
(again it must be in all caps) copy and paste the EBOOT.PBP into
update. EXIT USB MODE

Now go over to UMD in the psp selection menu. scroll down to Memory 
Stick, click it, if you have done everything correctly you should see
a file called PSP UPDATE, select that and your on your way to 2.0

**YOU MUST HAVE YOUR PSP PLUGGED IN TO A WALL CHARGER TO BE ABLE TO UPDATE**