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JHawkNH said:
Why was the 266Mhz restriction put on in the first place? Anyone know?

I have no source but when the PSP was released it was suggested that this restriction was put in place to ensure that the PSP had a long battery life. This could be a sign that they overestimated the battery drain, they don't care about the battery life, or a new version is going to come out and this is not an issue on the new version.