There are two better solutions to play FLAC on PSP
If you want to play FLAC on PSP in high quality, you can convert FLAC to 320kbps MP3. If you does not care music quality, converting FLAC to general mp3 is OK.
If you want to play FLAC with almost no quality loss, you can convert FLAC to WAV or convert FLAC to 24bit WAV(the best quality)
Here is detailed guide: