A single account is made. Funds are added to this account and the games are purchased. An account can be shared on up to 5 PSPs. Only one account can be active on a PSP at a time so while logged into this gamesharing account all games purchased by other accounts are disabled until you switch to that account. (Switching accounts is done either online or via PS3, it takes two minutes.)
The main difference is the psp only allows 1 user active at a time. So if you have PSP games on different accounts you have to activate your PSP on that account to play that game.