Open a text program, like Wordpad, and enter the following into the body of the text document:
CHAPTER01=00:00:00.000
CHAPTER01NAME=Intro
This will signify the first chapter of the MP4 file. Continue doing this, using "CHAPTER02" and "CHAPTER02NAME=Scenes1-10," or whatever you want to name the next chapter, and so on.
Save the text document with the name "title of your movie.chap." Download, install and open DVBPortal MP4Muxer, and click the "Browse" button to open a new window. Click on the MP4 video you want to add the chapter segments to, and click "OK."
Click the "Chapters" tab, and click "Import" to open another new window. Click the ".chap" file you created in Steps 1 and 2, and click "OK."
Click "Multiplex" to add the chapter file to the MP4 file. Go to where the MP4 file is on your computer, and right-click it. Click "Rename," and change the ".MP4" extension to ".M4V."
Copy the new video file onto your PSP memory stick in the "VIDEO" folder, and select the video from the PSP main menu to start playing the video. Press the "Triangle" button on the PSP to bring up the video menu. Select the chapter you want to play.