Cool. Glad you found the culprit. I turn off everything in MAME that is non-arcade (it has a ton of different types of handhelds which I dont want to see) so in the case of the PSP, I treat it as just another "console" for a different emulator.
Don't be too hard on yourself, the FE has gotten quite powerful, but along with that comes complexity.
BTW on a slightly different topic,
Attached is a pic of the image layout I was talking about, with the marquee, snapshot and control panel for MAME. This currently works great - at least in my unzipped image folder case. In EmuCon I had something similar but with title, snapshot and box art. You mentioned that this might be possible to do in a future release, but keeping the same layout for everything is a necessity. With that in mind, IMO it would be absolutely fine if all consoles were locked to a single set of categories (different than MAME of course), that would hopefully limit the options and hopefully some of the complexity on your end.
[ATTACHED IMAGE - CLICK FOR FULL SIZE]