Ok, I see alot of questions here, so I'm gonna take the time to answer alot of them.
Who do we thank for this achievement?
Thank Edison Carter. He's the man!!!
How do I use this?
All you need to do is install it on your memory stick, and load it.
And how would I go about doing that?
First you would need GTA:LCS (and a memory stick of course), then you take the folder that you download (depending on which counrty you live in, see below) and place it in 'X:\PSP\SAVEDATA\' (with X being the letter of your PSP). Once you start GTA, it will load (unless you have a newer save, in which case you would just load it from the start menu).
Which folder [in the .zip file] do I use?
If you have a UK version of GTA, you need to use 'ULES00151S5', if you have the US version, you need to use 'ULUS10041S5'.
Why is it still not working?
Check to make sure that all the files are in the right place, also make sure that the .bin file is named properly 'ex: tetris.bin'.
Does this work with any other games?
Not at the moment, it only works with Grand Theft Auto: Liberty City Stories.
Can I have more than one at a time?
Yes, using Fanjita's new technique.
What else can I do?
Jan 26th - First Release of the eLoader!!!
Download the Loader from here: eLoader
Specific installation guide here: 2.01/2.5 eLoader Setup guide
Is an EBOOT Loader for 2.60 possible?
It Can NOW!!!
Jan 29th - eLoader for 2.01/2.50/2.60
Does this work on 2.0/2.1/2.5/2.6?
Yes, it works on every firmware that GTA works on.
What about an ISO loader?
No, since there is no access to Kernel Mode, an ISO loader is basically out of the question.
Can I downgrade with this?
No, since the exploit is very limited, a downgrader looks very unlikely.
Is this Kernel Mode?
According to Fanjita (who has made homebrew gains using this hack ), this is not in Kernal Mode.
Will there be a downgrader?
Probably not, considering the lack of Kernel Access, and since there is no access to the flash memory.
How much memory is available?
About 20MB on 2.5, and 100KB on 2.6.