The framebuffer.png had to be set as wallpaper, then the overflow.tif file had to be placed in the PHOTO directory on the Memory Stick. Once opened in the photo viewer, the colour of the screen changed. It's not something you would really have use for but it is simply proof of concept, that an exploit exists and could be used for more useful code.
After this release, more stuff began surfacing for PSP 2.0 including Binary Loader v0.2 For PSP 2.0 which could execute a binary file (up to 64k) from the root directory of a Memory Stick. Then Hello World v1 For PSP v2.0 appeared and later a PSP Firmware Dumper And Flash Back-Up For 2.0. There was also a Pong Demo for PSP 2.0 released.
The ultimate goal would be to successfully launch homebrew elf files on PSP 2.0. There are already many many homebrew apps for the PSP written and available all over the Internet. Sony is worried about gamers being able pirate games by storing them on higher capacity Memory Sticks or playing games meant for other platforms.
Keep your eyes on the PSP sites to see what more will come from this.
Sources:
PSP Updates
PS2NFO