There are a few steps you must take to activate the PSP copy. When you insert the Blu-ray disc into the PS3, you'll see two icons appear on the XMB, one that allows you to store a SD version of the movie to your PS3 hard drive. You must be logged on to the PlayStation Network and then enter a unique 12-digit code included with the disc. Once the activation process is complete, a 2GB file will transfer to your PS3. You can watch this movie on the hard drive (but why would you when you have the Blu-ray disc?), or you can copy it over to the PSP -- a process which takes about five minutes total.
The video quality of the "Digital Copy" is fantastic, especially on the PSP's smaller screen. Unfortunately, the initial batch of movies leaves a lot to be desired: Godzilla (the 1998 American version), The Ugly Truth and Angels & Demons. Hopefully, SPHE will start implementing the feature on some ... y'know, good movies in the future.