the way i tryed to compile it was just by adding the makefile to the dir then editing it for the right OBJS but im not sure what ASFLAGS i should add to it to get it to assemble...
A better way would be to include regdef.h in the startup.s file (search for regdef.h in the psp software development forum)
Note that helloworld doesn't rely on the sdk libraries, using the sdk programming for the psp becomes easier (you don't have to worry about the register names)