From PSP Developer Wiki
There are many words that may confuse people or that they may not understand, this list is here to try and help.
|CFW||Custom Firmwares are modified versions of Official Firmwares released by Sony for the Sony PSP(PlayStation Portable). You have to use the Official Firmware file with the file that is provided when downloading CFW's. Custom Firmwares are made with the intention of unlocking the full potential of one's PSP, including a Recovery Menu, Internal Flash access, running of unencrypted code, running of UMD Game Backups in the form of CSOs, ISOs, or in Dark_Alex's DAX format.|