CFW isn't a file, it stands for Custom Firmware, like the PSP scene term. CFW lets you run CIA files (which are like WAD files from the Wii). CIA files can do whatever they want, including things like dynamic recompilers (which is how emulators like Dolphin, PPSSPP, PCSX-ReARMed, etc., on computers and phones get good speeds). Since you're more or less asking what these are, we can assume you don't have CFW. What firmware is your 3DS on? If it's low enough, you could install CFW (or downgrade and then install CFW), in order to run the CIA versions to get better performance.
Ninja'd: Saw 10.5. On 10.5 you can't get CFW without a hardmod + downgrade.
Without CFW, don't expect PS1 to run very well. The New 3DS, even though it's clocked much higher than the O3DS, is still not capable of running PS1 at full speed without CFW, basically.