to play newer games you just need to decrypt the EBOOT.BIN inside the ISO image. If you have space on your MS (which I presume you don't have that much space seeing that you only have a 2GB stick) you can use ISO tool by Takka (this method is explained in the tutorial that quikrazor87 posted a link to), but I usually use this method:
Stuff you need:UMDGen
to extract the Eboot.bin file and to reconstruct the image.Edecrypt
to decrypt the file.
this method is good because you don't need that much space on your memorystick. (I have tested this on God Eater Burst and Tactics Ogre)
Hope this helps
If you want anything translated to/from japanese (to/from english) for your Homebrew
, send me a PM and I'll see if I can help