To change the kernel, turn your psp compleltly off (hold switch down for several seconds) press down the 'r' button then turn the psp on. Go to game folder homebrew, should say 'currently:3.40 kernel'. If not keep pressing x till it changes to this.
To change your firmware you dont need to downgrade to 1.50 but if thats what your used to.
(Thanks to Lommer)
download this
zSHARE - recovery.rar
Start your PSP in Recovery Mode, then choose "Run program at /PSP/GAME/RECOVERY/EBOOT.PBP". Read the instructions and press x. This will Downgrade your psp to 1.50 version. Don't shutdown the PSP or remove the memory stick until the update is finished.
Once finished, shutdown the psp and restart manually to 1.50.
hope this helps