Hi

Makefile.psp belongs into the directory src/libmpg123.
In that directory readers.c you have to add to includes, looks like the 
PSP includes are little different. The diff output is in 
readers.c.patch. Its a diff against the readers.c from mpg123-1.1.0.

Config.h belongs into the directory src/. I am not sure whats the best 
settings for the PSP. Of course, not needed if PSP build is somehow 
integrated into configure. But crosscompiling via autotools is beyond 
me, thereforce I use that handmade Makefile.

Regards
Bastian
