You can delete MP_ROOT, that's just a leftover from the PSP's early days. You should be getting your games from your UMD and dump it yourself. Discussion of piracy is against forum rules. Honestly, PSP games are insanely cheap right now, just go buy them. It's not region locked. Make sure your dump is in ISO or CSO format and that the ISO/CSO is directly in the ISO folder. Also, I do believe there is a limit on how long the name can be. It can't be over 32 characters or something like that.
Also, make sure you're currently in CFW, if you've shut it off fully, you need to run Fast Recovery to go back into CFW and for the ISO/CSOs to show up.