Welcome to cueplayer for PSP.
To play cue file with flac, you need to place your cue file and flac file in the same directory. It is like this

. .. music1.flac music1.cue music2.flac music2.cue

The cue file and flac file should be the same name. 

Here is the button summary: 

NOTE, you should press and HOLD button to use any button. It is designed to avoid accident press.

When in file selection screen:
CROSS: select file or ascend directory.
TRIANGLE: Go back to upper directory.
CIRCLE: Start over

When playing music:

TRIANGLE: Goto file selection screen and stop player. It will automatically BOOKMARK now.
CIRCLE: Pause/ unpause player. DO NOT SEEK WHEN PAUSED. It is buggy.
CROSS: Goto the first track, or the starting point of the file.
SQUARE: Load bookmark.
HOME: Turn on/off backlight

L_TRIGGER: Previous track
R_TRIGGER: Next track.
To exit player, press home button. It will not bookmark though. 

