While it's fantastic that Sony has finally lifted the cap on the PSP's clock speed, letting developers finally use all 333MHz of the processor, it turns out there is a fairly substantial limitation to this. According to Beyond3D, they've confirmed that games will only run at 333MHz when the wireless feature is not being used. When wireless is engaged, the clock speed drops back down to 222MHz.

As they point out, this means that only single player games will use the 333MHz clock speed or else companies have to develop separate engines for the single player portion of the game and multiplayer portion. The restriction is assumed to be related to conserving battery life, but is obnoxious nonetheless. At least Beyond3D feels that the restriction will eventually be lifted (like all their previous clock speed restrictions), but until then developers are going to have to try to figure out how to deal with this limitation.

*Update*
Sony has confirmed.

via PSPFanboy

Wasn't there some problem with 333MHz and WiFi back in the DevHook days?
Maybe Sony are having the same problems as homebrew devs did...

I guess developers can continue sticking to the old speed for both online and offline play or reduce complexity of graphics (models, textures etc) and other calculations whilst online.

uhm thats great and all that there going to 333MHz but uhm even still that it gets dimmed down with online, what about the old psps? if their making games work at 333MHz how will older psps act with this? i mean yea, the old psps with homebrew can enable it but what about those who cant downgrade or have custom firmwares? its confusing to me..

From how I read it, it has nothing to do with old and new PSPs.
It's about new games running at 333MHz by default, but not while online.

yea lol i read that, i mean what about the old psps which clock at 222MHz without unlocking it..will this affect the old ones?

i see but itll be great if it runs 333mhz both on9 n off9

The old PSPs will clock at 333MHz when playing the new games.
I don't know what you mean by "unlocking it"; the software decides the CPU speed.

im really interested to see how this gets sorted out because i too dont know what it means to 'unlock n how would u do tht', more complications by sony!