This is a hardware limit, nothing you can improve on.
The machine was designed to run 3d games and entertainment material and it does a damn good job at that.
As for raw processing power many media mobile phones has the same power. New generation PDAs (the ones with vga displays and 600mhz cpus) are actually much better.
The only thing that the deivce does nicely is hardware texturing (similar to ps2, but hidden with the opengl like api) and video decoding so don't get your hopes high and take this from a Sony fanboy
A dell axim x50v is an incredibly powerful machine (compared to a psp anyway...) that you could program freely if you wanted to, and has similar or better 3d capabilites plus directx mobile.
Running uae on that at a somewhat acceptable speed is much more likely.