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First, realize that the Net Yaroze is not a special machine distinct from the grey Playstation. The Yaroze comes with a stripped down development library and a serial cable that allows code written on a computer to be uploaded into the memory of the PSX. This is possible with the normal Playstation as well.
PSX Development Method 1
You will need to burn a copy of the the Net Yaroze cd. The iso is available at this site. An Action Replay or Gameshark is also needed to store the code that beats the copy protection on the cd. This isn't simple country code protection, so more than a modchipped deck is needed. The protection method on the Yaroze boot disk is in the form of a special hardware token that is inserted into the memory card slot. The AR/GS codes are as follows:
You will then need to build a link cable to plug into a serial port on the PSX, or you can purchase one from your game shop, though it will probably need to be special ordered. The official item is communication cable DTL-H3050. Plans for building your own link cable are here.
PSX Development Method 2
Another method is to purchase an Action Replay and PC Commslink. The AR plugs into the parallel port on your PSX and the PC Commslink is an isa card for your computer. You will need to reflash the ROM of the AR with the Caetla ROM package (get it here). Development tools for Microsoft environments are available with the Caetla Package, or an entire Linux development system is available from here.
Currently we are working on a Tron type game and a GunCon shooter. I'll post tarballs of the code when I get a chance.
Yaroze PDF docs