The quote bellow is from another PSP related site, just using it as a reference.
Originally Posted by sayde
Strange thing is I am now having a similar problem. I'm on 3.40 OE-A, game worked fine, various FMV's loaded just fine........and then for reasons unknown to me the loop demo does the first second of audio repeat over and over, and other FMV's that play during the game like summons and such show the first frame and don't play (but it doesn't freeze).
The only change I've made from starting the game to when it started is that I've been using CW Cheat's(CWCHEAT 0.1.9 REV. D) screen cap feature, but it was fine while I was using it before. The ONLY thing I did was hold select while the game was loading to try to enable the screen cap feature so I could grab the 'FFVII 10th Anniversary' screen... and I think that's when my troubles started.
I've tried reloading the game, shutting off the PSP completely, disabling cwcheat.prx and cwcheatpops.prx, etc, etc...