Dont upgrade, that makes it so you cant homebrew on your psp.
You have to downgrade to firmware 1.5 and either stay there or do what I recommend and upgrade to a custom firmware.
do you have a TA-082 Motherboard? you can check.
if so follow this tutorial, tested and 100% working.
http://www.pspbrew.com/forum/viewtopic.php?t=6810
If you dont see that IC1003 follow this tutorial
DOWNGRADING A 2.71 HAS A 1 AND 10 CHANCE OF DOWNGRADING IF IT DOESNT DOWGRADE THE 1ST IT WILL JUST RESTART
if you are capable then you arre able to downgrade!!!

but before u start
USE THIS AT YOUR OWN RISK!
STEP ONE
download the 2.71 downgrader and make sure you get the full one
http://psp.xtrusion.es/content/descargas.htm
this is all you need you dont need any patch or anything and you dont need a gta game all you need is ur psp a usb cord and the downgrader(and also you need a 32 mb memory stick)
STEP TWO
connect you psp to your computer using a usb cord and after you connect go to setting and go to usb connection and click that
STEP THREE
once your in the root of your memory stick this should pop up
when this pops up scroll down until you find a picture of a folder and highlight the folder and click OKAY aftter u click okay it should bring u to a folder and its going to have psp folders in it..
STEP FOUR
you are ready to downgrade!!!run the full 2.71 downgrader and it will install files to ur psp.. and it will give you step by step instruction on what to do...when it says unplug and go to the photo menu do that and when you go to the photo menu something will happen cuz your orange light will be blinking and that means your memory stick is doin sometthing.
WHEN THE ORANGE LIGHT IS BLINKING DO NOT TURN OF YOUR PSP!!IF THE ORANGE LIGHT STOPPED BLINKING AND YOUR PSP SCREEN DIDNT TURN RED YET YOU HAVE TO RESTART AND DO THE PHOTO MENU STEP AGAINwhen you finnaly get your psp screen to turn red dont touch it at all its going to be downgrading.you will know when its done when the psp shuts off and give it two mins and turn it on again. if you did it correctly you will go through some settings for your new 1.5!!!
if your psp didnt downgrade please post
(made by newpspdude)
Goodluck and next time post in the proper section.