Well I think this would be the right place for your thread seeing how it has to do with emulation. I don't have a phat psp but I hear most people like 3.52 MEE-4....so I would suggest first downgrading to that. If you would rather use the CF you have....you can find all you need including emulators at this site :
PSP Slim Hacks PSP Hacks Custom Firmware PSP Slim Emulators Downloads
Also about playing ps1 games on your psp....the emulator is built into your psp. Just put the game folder containing the EBOOT into your PSP/GAME folder.
If you have any other questions make sure you try before asking. If you can't find your answer then feel free to ask.