I'm not sure what you meant by MOD. However, you manipulate your psp. You just need to know what you're doing.
Just make sure you have the following:
-Considerable large memory stick to fit games into.
-Correction psp version, from 1.5 to 2.0 (version 2.0, you would need to downgrade to 1.5)
if you have a new psp there are homebrew applications that you can download. if you have a psp that is over version 2.01 and you have gta liberty city stories you can still run a lot of homebrew apps but you need eloader for GTA.
go here for more information and other stuff http://www.fanjita.org/
you can also get hold of new flaceplates and buttons for your psp so there seems to be a fair amount of stuff about already that you can get.
only actually modifying the operation of equipment is illegal, such as mod chips... however since you can use any psp to play any game in existance there's no need for such things... however, removing the casing will void your warranty as i'm sure you are well aware