Sony has revealed plans to allow consumers to transfer their old UMD-based PSP games to the PlayStation Vita, which uses an entirely new format, but it's not free. The "UMD Passport" will allow players to transfer their old games at a discounted rate, ranging from $7 to $13 per game.
Including just 200 games from the system's forty publishers, it requires consumers to first download a UMD Registration Application from the PlayStation Store, then register their UMD with their PSN account (presumably inputting a serial number). On the plus side, transferred PSP games include a digital manual, bilinear filtering, and control options that make use of the right analog stick.
You will also be able to salvage your PSP's save files using the Vita's content management system on PS3 or PC.
Congratulations to Sony for charging people for games they've already bought. No, I mean that. It's pretty much the perfect way to sum up the videogame industry lately, and I commend the company on its stealthy satire.
Sony Details PSP Compatibility on PlayStation Vita [andriasang]