LED Fader Mod
*FuFa over at the AcidMods forums has posted details on how to rig your PSP with fading LEDs. The particular fader that *FuFa used operates in three modes: fade (activates when a button is pressed), all on, and all off.
Be aware that this project involves advanced soldering skills and will void your PSP's warranty. Check out a video of the mod and also instructions on how to put this together using the links below.
PSP LED Fader Mod VideoLED Fader Mod Instructions