Sony's still thinking about a solution, but whatever it turns out to be we better be prepared to pay for it.
Sony has recently outlined a rather impressive looking slate of upcoming games for the PS Vita during its TGS 2011 press conference. All of these will of course be appearing on the new handheld's own proprietary software format (a custom memory card with the game itself and some space for your saves).
Apart from the new software format, the PS Vita doesn't have a UMD drive, so backwards compatibility with its predecessor's sizeable catalog of games has been one of the many questions surrounding the handheld. Sony didn't have much to share about it during TGS aside from saying that it's still "thinking" of a way to let PS Vita owners play their old UMD-only games.
Sounds like what they said about the PSP Go a while back, and that didn't exactly turn out all hunky dory. Those willing to go down the homebrew route will probably find ways to transfer UMD games to the Vita just like what is happening now with the PSP Go, but that will likely still take some time after the handheld comes out while the community looks for ways around its security.
Earlier this year, Sony said that it was negotiating with developers and publishers to release UMD-only games digitally so that PS Vita owners can play them too. When we think about it realistically, that's the only remaining solution for PSP owners who really want to be able to play their UMB library on the new handheld. The question is, will Sony let people who already have the UMD versions get the digital version for free if that plan pushes through? Nuh uh. No way. A small discount maybe, but free? Not happening. We may be talking about games, but gaming is serious business, after all.
Then again, maybe it is time to leave UMD-only games behind and look towards the bright, shining future of... Wait, what am I saying? There's no way I can do that. I'll be getting a PS Vita, for sure, but I'll be making sure my old PSP 2000 remains in good working order for when I want to bust out something relatively old. I suggest you do the same too.