That's completely foreign to me. I never owned a PSP. Is it difficult to set up that workaround? Do I basically just download the Ad Hoc Party app and set up a connection through that?
Yes. Download the app, make sure your PS3 is WIRED (connected to the router directly) since the PS3 wifi needs to be open to tunnel for the PSP/titles and you're basically set.
http://www.gamesradar.com/how-to-take-your-psp-online-with-ad-hoc-party/
It's pretty simple to use, but obviously not popular since people wifi their PS3's. It's basically an official Sony supported "Xlink Kai" since Xlink doesn't work with OFW PSP's too well.