PSGroove is an open source program for executing the 'PSJailbreak' exploit, and injecting unsigned code into the lv2 gameos kernel during the PS3 boot process.
To use the exploit:
1) Hard power cycle your PS3 (using the switch in back, or unplug it)
2) Plug the dongle into your PS3.
3) Press the PS3 power button, followed quickly by the eject button.
If done correctly, after a few seconds, the first LED on your dongle should light up. After about 5 seconds, the second LED will light up (or the LED will just go off, if you only have one). This means the exploit worked! You can see the new "Install Package Files" menu option in the game menu.
Ask here for more help.