Most people I have known/met that ever modded any PSP games are programmers, so they create their own programs, and figure out the developers of the game do it. Almost all games are made differently, so there isn't just one 'universal' program to help you translate.
You can extract the game with Winrar, UMDgen is more of making the ISO file. Then you look around the files to see how they are stored ad how they were compiled. If the game is just one big file in the USDIR directory, then you need to find a way to extract that big file. Of course, there is a lot more things to do to translate successfully.
You need to know how to program, if you don't, then good luck figuring it out, and hope someone is able to help you.
EDIT - Oh yeah, and people use some type of hex editor to try and find a clue of the file they are looking at.