[sinphaltimus]

Yeah, you can just cut it.
Time Machine comes with full easy to understand instructions.
When you are on Custom Firmware, (after first install) you can format the card. It will place all the files and folders yo need on the card.
You will need to be plugged in to a power source to use your PSP (since the battery wont turn it on as a pandora) until you complete the timemachine install.
After the time machine isntall, there will be files that yo need to leave on the mem stick for it to work. Yo will learn this and what files when you are doing the install.