An ISO image (.iso) is a term for a disk image and is refered to any optical disc image. Basically its data files and all the filesystem metadata, (boot code, structures, and attributes) of a CD contained in a single file. Such as a PSP UMD in one file, or a PC game in one file.
OEA is a revision of a custom firmware made by Dark_AleX. If you want custom firmware, you need 1.50 firmware and on that you can play PSP ISO's.
I suggest that you do some more research on your own if you would like to know more about this
