You need the latest version to be able to access the PSN, so just update to the latest, it won't affect your ability to use UMD games.
Because the PSP E1000 has no wi-fi, you have the following choices, A) Some later UMDs can actually install the latest firmware themselves. B) Connect the console to a PC, you can download the update via the Media GO! tool.
yes it is legal, so you can play the game even if you lost the UMD.
ask your friend. usually if they play xbox360 its a greater chance. 1 of my fri is selling his for 50 bucks including umds and stuff
The number at the end is the PSP's region which can affect the movie UMDs you can play on it, and PSN availability. One marked as PSP-2000 is a Japanese model, PSP-2001 is the North American model.
There's no physical difference, the number at the end is the PSP's region which will affect what movie UMDs you can play, and some online features such as the PSN. PSP-2000 is the Japanese regional variant, PSP-2001 is the North American.