Following Firmware 5.0 going live last week Sony has found some issues with large Memory Stick PRO Duos. Update: The fix is now live.
This just in from the Official PlayStation Blog: "PSP firmware update 5.00 added direct access to the PlayStation Store, and we've since found an issue related to larger-capacity Memory Stick PRO Duos, which we'll be addressing with a new update (5.01).
"When downloading content from the Store to a PSP with an 8 GB or 16 GB Memory Stick Duo media inserted, you may see a message indicating that the media does not have enough free space, even when sufficient space exists. Update 5.01 resolves this issue and will be coming soon."
It's out now, big memory people.