On my relentless quest to get Brave Fencer Musashi working, I finally made it happen.

Needed-
-PSP
-Brave Fencer Musashi
-SimplePopStation
-CW Cheats
-Memory Card included in this post
http://rapidshare.com/files/72751919/SLUS-00726-0.mcr

Create the Eboot using SimplePopStation, using Game ID SLPS 01222. Upload it to your PSP.
Install CW Cheats according to its instructions, making sure to enable the plugins at the recovery menu.
Upload the .mcr file attached to this post into your seplugins/cwcheat/mc folder.
Launch the game from the PSP.
As soon as the Published By: Square Electronic Arts screen pops up (after the Playstation Logo), hold down select for 3 seconds to load CW Cheats.
Scroll to manage memory cards. Hit X, then make sure the Currently Selected Memory Card File is set to : SLUS_00726-0.mcr. Scrolls to Load memory card 1 from memory stick, hit X again.
Now when you exit the menu, hit Continue on the Main Menu, and load the first save. You will start in Grillin' Village, with no text scrambles or anything!
I'm unsure how complete this workaround is, but I'm assuming you can just keep using mcr's to skip any problematic areas (made from ePSXe - playstation emulator for PC)

Enjoy!

Edit: Ahhhhhhhhhhhhhhhhhh bugga. Scene changes don't work (Grillin -> Gondola etc.)
bollocks, gotta look for a better workaround >_>

thx

Man this game was really good when the PSX was famous and it is one of the best. Thanx for the awesome game!!