Well, i was in the verge of upgrading my psp with firmware 2.00 when i had the urge to see if it can run homebrew first.
I found out that it could, in my understanding, run homebrew using eLoader.
Now i checked which programs can run with the eLoader and found out that it has different emulators including a ps emulator called the pspsone. My question is, is is there any possible ISO loader or UMD emulator for eLoader that people know? Is it possible to play iso, downloaded psp and ps2 games on it?

You were clever to check if you could run homebrew before updating; so many people don't and end up on 3.51/3.52 with little hope of running homebrew in the near future.
Although you can run homebrew using 2.00, personally I wouldn't.
It is a pain having to use eLoader all the time and it doesn't have great compatibility.

What I would recommend is to downgrade to 1.50 and then install custom firmware (such as 3.40 OE-A).
On 3.40 OE-A you can play PSP and PS1 ISOs natively from the XMB (no other apps required).
This should get you started: Easy 2.00 Downgrader

yeah, it's more convenient to use custom firmware, you won't need the eloader anymore... plus you can customize your xmb with cfw...

Yeah, i was glad i checked too, as i originally thought only 1.5 could run those stuff.

As for downgrading, i'm still thinking about it, as i've heard so many 'tales' of people bricking their psp's when they downgraded it themselves. It is one of the reasons that i wanted to look for an alternative to homebrew without downgrading.

But thanks, i might just do that!