How is the glowing of the objects implemented on the PSP - like the icons and text in the XMB, text in SNES9XTYL, etc...? Normally I would assume that one would have to write the code to determine image's boundaries and generate a "glow" accordingly, but the effect is so common on the PSP, that I'm starting to wonder if this is an effect that is provided by GU?
AFAIK such an effect is not bulk-implemented by PSP GU. Glows/shadows under the icons in the programs you mention are simply artworks prepared "offline". Anyway, the effect is commonly runtime achieved taking the luminance part of an image (take a look on RGB-YUV conversion....luminance is the "Y" part) as long as its alpha-channel and blurring it with something like average or gaussian blur.
Pre-processing effect. Have your icon or whatever in photoshop and add just add an outer glow and some blur. I would assume this is nothing more than just a simple "mouse over" type of effect where the texture/image is replaced with the glowing one once the icon is selected.
I think the easiest & nicest way would be to make one standard icon image, and then another image containing just the outter glow. Now when the icon is activated, increase and decrease opacity of the outer glow with timing.
However, I think XMB makes the glow on the fly with GU - for example in XMB pretty much any icon you put in XMB works.
The glowing borders are pre drawn for each icon and stored in the RCOs. All that happens code wise is that the alpha amount is increased and decreased to make it fade in and out.