In a typical PSP game:
* UMD_DATA.BIN is essentially header data about the UMD (disc.) It's mainly the disc ID.
* PSP_GAME/PARAM.SFO contains key/value pairs. Contains the text shown in the XMB, for example (which you may want to change for a translation.) See PPSSPP's ParamSFO to parse, but it's simple: https://github.com/hrydgard/ppsspp/blob/master/Core/ELF/ParamSFO.cpp
* PSP_GAME/SYSDIR/BOOT.BIN (not EBOOT which was already mentioned) is not actually used by official firmware and is often zero filled. For games made for firmware < 3.00 it sometimes contains the original binary. Mostly you should ignore this for hacking.
* PSP_GAME/SYSDIR/UPDATE/ - do not confuse the EBOOT.BIN in here with the other one. It's for on-disc firmware updates. Same for PARAM.SFO.
* PSP_GAME/USRDIR/ will typically contain files that are game-specific. The directory structure and files included at that point are up to the game.
* PSP_GAME/INSDIR/ will contain game defined files (usually DATA.BIN or similar) that would be installed on the memory stick if "Data Install" is selected. Often encrypted to impede modding/cheating.
You'll often find the following files:
* *.prx - essentially a DLL. Most games use Sony official libraries for video playback etc. Sometimes these are versions of libraries that were ultimately included in newer versions of firmware. In rare cases (like Valkyrie Profile and some MGS games), games may use prx files to load parts of the game itself, such as battle scenes. This is uncommon, though.
* *.pmf (sometimes other extensions) - video file.
* *.at3 - audio file.
* *.png - probably obvious, image file.
* *.gim - image file (usually embedded in other files.)
* *.bin, *.pak, *.dat, etc. - game defined data format. No standard.
You will very often find English text in ELFs (binaries) like EBOOT.BIN. This is because it's compiled and contains logging messages from the original developers (isn't that nice of them?) It may even contain C standard library error messages.