Make sure you get some form of online tracking or delivery confirmation when you ship the broken PSP back to him. If you cannot prove that you returned the PSP, Ebay can't do jack shit to help you get your money back.
This happened to me. I bought a Game Boy Micro that the seller claimed was in excellent condition, but it was in completely horrible condition. I sent it back but didn't get any kind of proof, so Ebay couldn't force the seller to refund my money. And of course the seller didn't refund my money on her own. I got tricked twice in a row, but I learned something from it.