Sony Computer Entertainment America's Dave Karraker, Sr. Director, Corporate Communications, has confirmed to GameDaily BIZ that the PlayStation Portable cannot use its full CPU power at the same time that Wi-Fi is enabled, meaning that games with network gameplay cannot tap into the full 333MHz clock speed.
"The recent firmware upgrade (3.50) that removed the restriction on the PSP's CPU speed enables developers to utilize speeds either lower or higher than the default 222MHz, up to the full 333MHz clock speed. The article is correct that increased CPU speed cannot be used with the PSP's wireless feature," Karraker said. "SCEA is working closely with the development community to take full advantage of this new functionality where appropriate for their titles."
It's not clear why this limitation is in place – speculation suggests that it's an effort to conserve battery life, which is already affected when Wi-Fi is on – but SCEA told GameDaily BIZ they would check in with SCE in Japan.