As far as I know this is just for downloading the files via PC, installing them still gives you the same error since back in PS3 Firmware 2.36.
However, if you actually own the game then it can be installed as detailed by aldostoolsHERE. In short, there is no way short of discreet gamesharing with a friend to get "free PSN games" at the moment.
Thank you, for your questions... and i thought i would provide some answers.
Q: Is there an installation issue on PS3
A: It works on any firmware, and no issues yet.
Q: What is the purpose
1. Using a proxy usually speeds up downloads
2. Unlike 3r1c's proxy this automatically redirects downloads
3. Ability to play on the console and downloads won't pause
And many more...
Q: Can use it to download full games without paying
A: Yes, but i don't take responsibility for your actions.
Q: Does this work in the USA
A: Currently only supports the UK Store.
And I've released a new version with some bug fixes.
>> Prevented multiple Instances of same download (1.74)
>> Game Patches wouldn't download (1.87)
>> Fixed Initiate Process which caused PS3 not to download from the PC (1.87)
>> Minor changes in the operation of the code, to enhance performance. (1.87)
>> MP4 File Ready extension has been corrected (1.92)
>> The Game Patch fix from 1.87 didn't work for most game updates (1.92)
Know Issues (Unable to be fixed)
>> Some PSN content which is paid for cannot be paused (Ends with Error)